Orissa High Court
Case Details
Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 11-Sep-2025 18:36:44 IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.14664 of 2016 (In the matter of an application under Articles 226 and 227 of the Constitution of India, 1950). Saroj Panda …. Petitioner (s) -versus- …. Opposite Party (s) Odisha Industrial Infrastructure Development Corporation, Khurda & Anr. Advocates appeared in the case through Hybrid Mode: For Petitioner (s) For Opp. Party (s) : : Mr. G.N. Mishra, Adv. Mr. Pronoy Mohanty, Adv.. CORAM: DR. JUSTICE SANJEEB K PANIGRAHI DATE OF HEARING:-21.08.2025 DATE OF JUDGMENT:-10.09.2025 Dr. Sanjeeb K Panigrahi, J. 1. In this Writ Petition, the Petitioner seeks a direction from this Court to quash the cancellation and eviction order dated 11.08.2016, declare him absolute owner by virtue of OSFC sale under Section 29(2) SFC Act, and direct the IDCO to effect formal lease transfer. I. FACTUAL MATRIX OF THE CASE:
Legal Reasoning
2. The brief facts of the case are as follows: Page 1 of 11 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 11-Sep-2025 18:36:44 (i) The property in dispute is an IDCO shed situated at Balasore Industrial Estate. It was originally leased in 1994 on an outright purchase basis for establishment of a biscuit manufacturing unit, with a lease deed executed on 30.11.1994. (ii) The lessee mortgaged the property to Odisha State Financial Corporation (OSFC) with IDCO’s consent. Upon default in repayment, OSFC invoked Section 29 of the State Financial Corporations Act, 1951, and took over the unit. (iii) OSFC initially sold the unit to one purchaser in 1999, later cancelled the sale in 2000, and subsequently sold it to the present petitioner through a sale letter in 2006. Possession was delivered on 29.11.2008. (iv) The petitioner, after purchase, applied for transfer of the lease in his favour. IDCO’s Divisional Head forwarded his application dated 02.12.2010 along with possession letter, sale documents, and a project report for Hotel Raghunath. (v) The petitioner furnished documents in 2015, including communications regarding the NOC and DIC acknowledgement. (vi) IDCO issued notices in 2015 and 2016 citing breaches of terms, including non-utilisation of property for intended industrial purpose, alleged misutilisation for residential and godown activities, sub-letting, and unauthorised construction. (vii) The petitioner replied to the notices, but on 11.08.2016, IDCO passed an order cancelling the allotment/lease and declaring the petitioner liable for eviction under the OPP (EUO) Act, 1972. Page 2 of 11 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 11-Sep-2025 18:36:44 II. SUBMISSIONS ON BEHALF OF THE PETITIONER: 3. (i) Learned counsel for the Petitioner earnestly made the following submissions in support of his contentions: The petitioner argues that once OSFC sold the property under Section 29(2) of the SFC Act, ownership vested absolutely in him free of encumbrances, and IDCO/opposite parties had no jurisdiction to cancel or evict. (ii) The requirement for fresh lease transfer was redundant and only a formality; still, the petitioner complied by submitting documents sought (Tourism Department NOC and DIC acknowledgement), which were ignored. (iii) The eviction order dated 11.08.2016 is arbitrary, vague, and mechanical, passed without any proper enquiry or opportunity of hearing, thereby violating principles of natural justice. (iv) Opposite Party No.2 had no authority to cancel lease or order eviction, as such power rests only with IDCO as a Corporation. The impugned action is ultra vires and without jurisdiction. (v) The alleged grounds of breach of terms are baseless since statutory dues were paid and documentary requirements fulfilled. The order is punitive despite petitioner’s compliance. (vi) The petitioner asserts violation of his constitutional right to property, as he had purchased the unit for valuable consideration and has been in lawful possession since 2008. He invokes writ jurisdiction for quashing of the impugned order and formal transfer of allotment/lease in his name. Page 3 of 11 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 11-Sep-2025 18:36:44 III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTIES: 4. (i) The Learned Counsel for the Opposite Parties earnestly made the following submissions in support of his contentions: The cancellation and eviction action was not arbitrary but strictly in accordance with the Odisha Industrial Infrastructure Development Corporation (OIIDC) Act, 1980 and the OPP (EUO) Act, 1972, both empowering IDCO to ensure industrial lands are used only for intended purposes. (ii) The petitioner is guilty of serious negligence, having delayed transfer applications and failed to produce essential approvals like NOC from Tourism Department and EM-I from DIC. His requests for more time show lack of readiness to comply. (iii) The petitioner misutilised the industrial property by using it for residential and go-down purposes and sub-letting to other entities, amounting to breach of the allotment’s core conditions. Unauthorized construction further compounded violations. (iv) IDCO repeatedly issued notices and reminders, but the petitioner failed to comply, leaving no option but to proceed under the OPP (EUO) Act for eviction. (v) The petitioner has suppressed material facts, misused the plot, and has not approached the Court with clean hands. Therefore, he is disentitled to equitable relief.
Decision
(vi) The writ petition is devoid of merit, the allegations of arbitrariness are unfounded, and the prayer for quashing of the cancellation/eviction order deserves outright dismissal. Page 4 of 11 IV. COURT’S REASONING AND ANALYSIS: Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 11-Sep-2025 18:36:44 5. 6. Heard Learned Counsel for the parties and meticulously analysed the documents placed before this Court. The petitioner’s first contention, that the sale of the unit by OSFC under Section 29(2) of the State Financial Corporations Act vested absolute ownership in him, leaving IDCO with no say, is misconceived. In law, an auction purchaser of a leasehold acquires only the interest of the original lessee, subject to all attendant conditions of the lease and the lessor’s rights. The IDCO shed in question was allotted under the Odisha Industrial Infrastructure Development Corporation Act, 1980 (“OIIDC Act”) on specific terms restricting its use to approved industrial purposes. The OSFC’s sale did not and could not convey a greater title than that held by the defaulting lessee. In other words, the petitioner stepped into the shoes of the lessee and remained bound by the OIIDC Act and the lease terms, including the requirement to obtain IDCO’s approval for transfer and to use the plot only for the sanctioned industrial project. His possession without formal transfer of lease was therefore permissive at best, and certainly not immune from IDCO’s regulatory control. 7. It is undisputed that since taking possession in 2008, the petitioner failed to establish any industrial unit on the plot. Instead of operating a biscuit manufacturing unit (for which the land was originally allotted) or any approved industry, the petitioner proposed a hotel project and admittedly used the premises for non-industrial purposes like residential accommodation and as a go-down, even sub-letting portions to third parties. These actions were in clear breach of core conditions of Page 5 of 11 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 11-Sep-2025 18:36:44 allotment. Statutory industrial development corporations are empowered, indeed obligated, to ensure that allotted lands are utilized for the intended industrial objectives and not diverted for other uses. 8. In the present case, IDCO gave the petitioner ample time (several years) and repeated opportunities to comply: his application for lease transfer remained pending as IDCO awaited necessary clearances (Tourism Department NOC for the hotel project and DIC registration) and monitored the status. Despite this indulgence, the petitioner neither commenced the approved industrial activity nor produced the requisite approvals in time. Instead, he allowed the plot to remain unutilized for its sanctioned purpose and undertook unauthorised constructions and sub-letting, violating the allotment’s fundamental conditions. 9. The Supreme Court and various High Courts have consistently held that such serious non-performance of mandatory allotment conditions justifies cancellation of the allotment and resumption of the land by the authority. In fact, the Supreme Court in the case of Kamla Nehru Memorial Trust v. U.P. State Industrial Development Corporation Limited and Ors.1 recently reiterated in the context of an industrial land allotment, allowing deliberate default to persist would undermine the entire framework of land allocation. Therefore, treating an allottee as defaulters and cancelling the allotment is fully justified and necessary to preserve the integrity of the allotment process. The relevant excerpts are produced below: “We may hasten to add at this stage that the dues for the Subject Land, allotted in 2003, remained unpaid despite multiple communications spanning several years. KNMT 1 2025 INSC 791. Page 6 of 11 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 11-Sep-2025 18:36:44 not only failed to make timely payments but also sought unwarranted concessions, including waiver of interest and rescheduling of dues. This persistent non-compliance establishes KNMT as a chronic defaulter, while the continued attempts to seek waiver evince a deliberate strategy to avoid payment obligations. UPSIDC’s action in treating KNMT as a defaulter was, therefore, both justified and necessary to preserve the integrity of the allotment process. Allowing such deliberate defaults to persist unchecked would undermine the entire framework of land allocation and set a detrimental precedent.” 10. The petitioner’s contention that Opposite Party No.2 (an IDCO official) had no authority to cancel the lease or initiate eviction is not borne out by the record. The impugned order dated 11.08.2016 was issued under the provisions of the OIIDC Act, 1980 and the Orissa Public Premises (Eviction of Unauthorised Occupants) Act, 1972 (“OPP Act”). Under these statutes, IDCO, a statutory corporation, acts through its authorized officers. IDCO’s Estate Officer is empowered to cancel the allotment for breach of conditions and to initiate eviction proceedings against an unauthorised occupant of IDCO property. 11. Here, after the petitioner persistently failed to remedy the breaches, IDCO followed due process by issuing show-cause notices (in 2015 and 2016) detailing the alleged violations. The petitioner submitted replies, which have been duly considered. An eviction case was then instituted under the OPP Act, and the Estate Officer passed the final order on 11.08.2016 cancelling the lease/allotment and declaring the petitioner liable to be evicted. The materials show that the petitioner was given adequate opportunity to be heard during this process; indeed, the Estate Officer’s order was passed only after affording the petitioner due and Page 7 of 11 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 11-Sep-2025 18:36:44 sufficient opportunity of hearing. There is nothing to indicate that the mandatory procedure, notice, opportunity to show cause, and reasoned order, was not followed. Hence, the allegation of violation of natural justice is devoid of merit. 12. It is also noteworthy that the OPP Act provides a statutory remedy of appeal against an eviction order. The petitioner, instead of availing any such remedy, directly invoked this Court’s writ jurisdiction. Be that as it may, the Court has independently reviewed the impugned action and finds that IDCO acted within its jurisdiction and in accordance with law. The cancellation of the allotment was carried out under the authority of the OIIDC Act/Regulations governing industrial estates, and the eviction order was passed by a competent Estate Officer under the OPP Act. No procedural infirmity or ultra vires action has been demonstrated in the conduct of the opposite parties. The right to property under Article 300A of the Constitution, which the petitioner invokes, is not absolute; it is subject to the “authority of law”. In this case, the deprivation of the petitioner’s possessory interest has the sanction of law – namely, the terms of the statutory lease and the OPP Act eviction mechanism. Therefore, his Article 300A rights have not been violated. 13. A writ court, in exercise of its extraordinary equitable jurisdiction, will not intervene to protect a litigant’s purported rights when his own conduct is tainted by breaches and neglect of obligations. Here, the petitioner has approached the Court seeking to quash IDCO’s cancellation order despite himself being in egregious default of the essential conditions of allotment. He remained in possession of a public Page 8 of 11 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 11-Sep-2025 18:36:44 industrial property for over eight years without establishing the promised industry, and even turned the property to personal and unauthorised uses. He also delayed compliance with formalities for transfer and approvals, and even after IDCO’s show-cause notices, no corrective steps were taken. In these circumstances, the petitioner cannot be said to have come to the Court with clean hands. 14. In fact, the Supreme Court in the case of Industrial Dev. Corpn. V. Mesco Kalinga Steel Ltd.2 squarely held that an allottee who, by his own inaction, fails to fulfil the basic terms of lease has forfeited the right to claim any further rights in the property. The transaction in such a case becomes void due to the lessee’s negligence, and no equity lies in favor of one who has failed to make any development of worth on the land. The relevant excerpts are produced below: “The transaction became void, due to Mesco’s own lapse and negligence, and it has forfeited the right to get the lease deed executed. After taking possession, it could not have waited for so many years. What was required to be performed by Mesco was not done. It also failed to make any development of worth on the land. We find no force in the submission that they have spent a sum of Rs.22 crores as they were unable to explain how they spent the said amount, and only a bald statement was made that they have constructed a boundary wall. It has not been established that a sum of Rs.22 crores had been spent by Mesco. Apart from that, having failed to execute the lease deed, they were to invest at their own peril. In case they have invested some amount, on that basis they cannot claim any legal or equitable right.” 2 AIR ONLINE 2017 SC 290 Page 9 of 11 15. The Court sternly further observed that there is no legal or equitable basis to aid a defaulting allottee, and a writ is not issued to perpetuate an illegality. The relevant excerpts are produced below: Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 11-Sep-2025 18:36:44 “Thus, High Court misadventured into holding the action of IDCO of resumption of land to be illegal. There was no equitable or legal consideration in favour of the respondent herein and a writ is not issued to perpetuate an illegality. Not only the conduct of Mesco was unfair, third party rights had also intervened. Lawful method had been exercised for resumption of land and cancellation of letter of handing over the possession.” 16. This Court is in full agreement. To accede to the petitioner’s prayer would effectively perpetuate an unlawful possession and misutilisation of public industrial land, to the detriment of the planned industrial development for which the plot was earmarked. Such an outcome is impermissible. 17. Viewed in totality, the impugned actions of IDCO cannot be faulted. The petitioner’s long-standing non-compliance with the allotment conditions, unexplained delays, and misuse of the property disentitle him to any relief in equity or law. IDCO was within its rights to cancel the lease/allotment and resume possession once it became clear that the petitioner was in fundamental breach and had failed to cure the same despite opportunities. The conditions of allotment were clear-cut and were accepted by the petitioner with open eyes; he cannot now escape the consequences of his own default. There being no procedural illegality or abuse of power demonstrated in IDCO’s decision, this Court finds no ground to interfere with the impugned order. 18. Accordingly, the Writ Petition is dismissed. Page 10 of 11 19. Interim order, if any, passed earlier stands vacated. Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 11-Sep-2025 18:36:44 Orissa High Court, Cuttack, Dated the 10th Sept., 2025/ (Dr. Sanjeeb K Panigrahi) Judge Page 11 of 11