M/S Prajjwal Industries And Another v. Counsel for

1. Heard Shri Ashutosh, learned counsel for the petitioners; Shri Fuzail Ahmad Ansari, learned Standing Counsel for State respondent no.1 and Shri Dhananjay Awasthi, learned counsel for respondent nos.2 to 4.

2. The instant writ petition is preferred interalia for following reliefs:- "(I). a writ, order or direction in the nature of certiorari to call for records and to quash the cancellation order dated 22.05.2025 passed by respondent No.03 in respect of plot No.H-2, Sector-15 situated at Gorakhpur Industrial Development Authority (GIDA), Gorakhpur. (II). a writ, order or direction in the nature of prohibition, restraining the respondents from allotting Plot No.H-2, Sector-15 situated at Gorakhpur Industrial Development Authority (GIDA), Gorakhpur (which has been allotted to the petitioner) to any other third person. (III). a writ, order or direction in the nature of mandamus commanding the respondents to accept the outstanding dues from the petitioner and hand over physical possession of the Plot No.H-2, Sector-15 situated at Gorakhpur Industrial Development Authority (GIDA), Gorakhpur to the petitioner. (IV) issue any other writ, order or direction as this Hon'ble Court may deem fit and proper in the circumstances of the case. (V). award costs to the petitioner." 2 WRIC No. 23271 of 2025

3. It appears from the record that Gorakhpur Industrial Development Authority (GIDA), Gorakhpur had allotted a plot No.H-2 area 714.00 square meters situated in Sector No.15, District Gorakhpur to one Manoj Kumar Yadav vide allotment letter dated 24.06.2014 for establishing an industrial unit of plastic glass. On account of financial difficulties, he moved an application dated 28.02.2017 seeking permission to transfer the aforesaid plot in favour of M/s Prajjwal Industries (petitioner firm) for setting up an industrial unit of Grill, Channel etc. The petitioner firm deposited an amount of Rs.2,05,490/- (Rs.2,03,490/- as transfer fees + Rs.2,000/- processing fee) in the saving account of GIDA vide Chalan No.16429 dated 20.02.2017. Thereafter, the GIDA vide order dated 29.06.2017 had accorded permission to the original allottee to transfer the aforesaid plot in favour of the petitioner firm, with a condition that all the earlier terms and conditions would be applicable and the petitioner firm would also be liable to deposit the remaining amount/installments. As per the terms and conditions of the allotment, the petitioner firm was required to execute the lease deed and commence production within two years, subject to fulfilling certain financial and statutory conditions including payment of dues and production of temporary registration certificate.

4. It is claimed that in pursuance of the allotment letter, the petitioner firm had deposited Rs.16,00,000/- on different dates but on account of financial difficulties, it could not establish the industry within the stipulated time. The Chief Executive Officer, GIDA, Gorakhpur (respondent no.3) had issued a notice to the petitioner firm on 06.07.2021 for depositing the balance premium and other charges, amounting to Rs.20,29,466/-. By the impugned order dated 22.05.2025, the respondent no.3 had cancelled the allotment of the petitioner firm on the ground that several letters were written to the petitioner firm for depositing the amount and establishing the industrial unit but neither the petitioner firm had deposited the outstanding amount in the account of the SIDA nor taken possession of the land in question for executing the lease deed. Further, more than seven years have passed from the date of allotment and the petitioner firm had not shown any interest to establish the industry on the allotted plot.

5. Shri Ashutosh, learned counsel for the petitioner in this backdrop vehemently submitted that the petitioner firm is willing to set up the industrial unit over the land in question. The notice dated 06.07.2021 was not served on the petitioner firm and when it came to the knowledge of the petitioner firm, it has moved an application before the respondent authority on 15.05.2025. He submits that no sufficient opportunity had been afforded to the petitioner and it was not open to the respondent authority to have 3 WRIC No. 23271 of 2025 illegally and arbitrarily cancelled the allotment of the subject plot. The petitioner firm is ready to deposit the outstanding amount and comply with all terms and conditions of the allotment. The petitioner firm has also assured that it will start the factory within six months from the date of permission. However, without considering the application of the petitioners, the impugned order dated 22.05.2025 has been passed. He submits that the said land has not been allotted to any other party till date and the principles of natural justice were not adhered to in the instant matter. In support of his submission, he has placed reliance on the judgement of Apex Court in A.K. Kraipak vs. Union of India, AIR 1970 SC 150; Ridge vs. Baldwin (1970) AC 40; K.K. Balla vs. State of M.P. (2006) 3 SCC 581; MCD vs. Qimat Rai Gupta (2007) 7 SCC 309 and Dharampal Satyapal Ltd. vs. Dy. Commissioner of Central Excise (2015) 8 SCC 519.

6. Per contra, Shri Dhananjay Awasthi, learned counsel for respondent authority has vehemently opposed the writ petition and submitted that the GIDA vide order dated 29.06.2017 had accorded permission to the original allottee to transfer the subject plot in favour of the petitioner firm, subject to deposit of transfer charges and other charges. Despite repeated reminders and notices dated 06.01.2021, 14.06.2021, 09.12.2021, 23.06.2022, 20.12.2022, 14.06.2023, 23.06.2023, 07.08.2023, 08.07.2024, 26.06.2024, last notices dated 27.08.2024, 11.03.2025 and 16.04.2025, the petitioner firm neither cleared the outstanding dues nor established a functional industrial unit on the allotted plot. He further submits that the cancellation of the allotment of the plot in question is legal, justified and strictly in accordance with the conditions stipulated in the allotment letter. Lastly, it is urged that since the petitioner has failed to fulfill the essential terms and conditions of the allotment letter, the impugned order has been rightly passed. The present writ petition is devoid of merit and liable to be dismissed.

7. We have considered the rival contentions and perused the record.

8. For the complete and planned development of Eastern Uttar Pradesh, GIDA was incorporated by the State Government on 30th November 1989 under Uttar Pradesh Industrial Development Act 1976. The land is acquired by the State Government for the GIDA for development and allotment to the deserving applicants for setting up small and medium scale industries. The GIDA is entrusted with the responsibility of developing and maintaining requisite infrastructure, providing incentives, and creating a conducive environment for businesses to establish and expand their operations in eastern U.P.. In furtherance of these objectives, the GIDA also endeavours to generate employment opportunities and to support and strengthen the growth of existing industries in eastern Uttar Pradesh. 4 WRIC No. 23271 of 2025

9. It is an admitted position that the GIDA vide order dated 29.06.2017 had accorded permission to transfer the subject plot in favour of the petitioner firm for setting up an industry over the said plot, subject to specific terms and conditions. As indicated above, since 2017, at no point of time the petitioner firm had proceeded to make any construction over the plot in question. Nothing has been brought on record to indicate that at any point of time, the petitioner firm had made any effort to start the construction and to run the industry. It had not utilised the said plot for about seven years and further it did not make any effort for execution of the lease deed. The petitioner was under a contractual as well as statutory obligation to clear all outstanding dues, obtain necessary approvals, undertake construction, and commence industrial operations within the prescribed timeline. Despite repeated reminders and notices issued by GIDA on various occasions, the petitioner firm failed to ensure effective compliance and has not deposited the outstanding amount in pursuance of the aforesaid notices. Consequently, the GIDA had proceeded to cancel the allotment of plot in question on

22.05.2025.

10. The decision of Hon'ble Apex Court in Skyline Contractors Pvt. Ltd. v. State of U.P (2008) 8 SCC 265 squarely applies to the facts of the present case. In that matter, despite partial and delayed payments by the allottee, Hon'ble Supreme Court upheld the cancellation of allotment by NOIDA, holding that unilateral deposits made without prior approval or consent could not bind the authority.

11. In a recent judgment and order dated 11.07.2025, passed by a Coordinate Bench of this High Court in WRIT - C No. 21819 of 2025 (Smt. Savita Sharma vs. State of U.P. and 2 others), the cancellation of allotment by UPSIDA was upheld. The Court held that the restoration of a lease deed after fourteen successive failures to pay dues and violations of statutory provisions is not merely a matter of administrative discretion, but rather strikes at the very foundation of fiscal discipline, public interest, and the objectives of industrial policy. The relevant portion of the judgment is reproduced herein below:- "17. Successive failures to comply with lease terms also undermine public interest. Permitting continued retention of land by a non-performing allottee deprives deserving applicants of opportunities and slows down industrialization efforts. If such conduct is tolerated through writ jurisdiction, it may erode public confidence in the fairness and transparency of the State's land allocation framework.

18. Restoration of leases after repeated defaults may be viewed as 5 WRIC No. 23271 of 2025 arbitrary or ultra vires, particularly when it contravenes the express terms of the allotment letter or lease deed. The Supreme Court in Skyline Contractors Pvt. Ltd. (supra) have emphasized that deliberate non- compliance with payment schedules and lease conditions justifies cancellation of allotments. Courts have consistently held that leniency towards such defaulters undermines the integrity of the allotment process and sets a detrimental precedent.

19. A policy of restoring leases after long-term default would create a negative precedent for future allottees to disregard payment schedules and statutory obligations, anticipating eventual concessions. This undermines the deterrent effect of enforcement measures like cancellation and e- auction, weakening the overall governance framework of industrial land allocation.

20. In essence, restoring a lease deed after 14 successive failures to pay dues and violations of statutory provisions is not merely a question of administrative discretion; it strikes at the very foundation of fiscal discipline, public interest, and industrial policy objectives. The UPSIDA has acted in a manner that balances equity with accountability, ensuring that public resources are allocated to genuine entrepreneurs who can contribute to economic development and employment generation. Any contrary approach risks financial losses, delays in industrial growth, and erosion of public trust in the State's administrative fairness.

21. Therefore, having regard to the petitioner's repeated non-compliance with the demand notices dated 07.12.2020, 02.06.2021, 07.12.2021,

22.12.2021, 04.03.2022, 26.05.2022, 12.07.2022, 24.11.2022, 14.12.2022,

14.03.2023, 09.06.2023, 19.09.2023, 28.12.2023, and 07.03.2023, coupled with the violation of Clauses 15(a), 15(b), 15(c), and 23 of the lease deed dated 09.09.2020 as well as other provisions of the Urban Planning and Development Act, 1973, this Court finds no ground to extend indulgence in the exercise of its writ jurisdiction. The grounds urged by the petitioner do not merit interference under Article 226 of the Constitution of India, as UPSIDA's actions are neither arbitrary nor violative of the principles of natural justice.

22. Accordingly, for the reasons stated hereinabove, the writ petition fails on merits and is hereby dismissed. There shall be no order as to costs."

12. The argument regarding the lack of opportunity of hearing or violation of natural justice also does not hold weight in the present context. The cancellation was a consequence of non-compliance with a mandatory financial requirement and not based on any disputed fact that necessitated an 6 WRIC No. 23271 of 2025 adjudicatory process. The allotment provided a clear and automatic consequence for failure to deposit the required amount, and the repeated extensions provided by the authority only demonstrate that procedural fairness was afforded to the petitioner. In such circumstances, the principle of audi alteram partem cannot be stretched to override express contractual obligations.

13. In view of the above, the Court is of the considered opinion that the impugned order dated 22.05.2025 is neither arbitrary nor in violation of any statutory or constitutional provision. The petitioner, despite several opportunities and indulgence shown by GIDA, failed to discharge its core obligation under the scheme. There is no manifest illegality or procedural impropriety in the decision of the authority that would warrant judicial interference under Article 226 of the Constitution.

14. In the aforesaid facts and circumstances, we do not find any plausible reason to interfere with the impugned order. Accordingly, the writ petition is dismissed. October 10, 2025 RKP (Kunal Ravi Singh,J.) (Mahesh Chandra Tripathi,J.) RAKESH KUMAR PATEL High Court of Judicature at Allahabad

1. Heard Shri Ashutosh, learned counsel for the petitioners; Shri Fuzail Ahmad Ansari, learned Standing Counsel for State respondent no.1 and Shri Dhananjay Awasthi, learned counsel for respondent nos.2 to 4.

2. The instant writ petition is preferred interalia for following reliefs:- "(I). a writ, order or direction in the nature of certiorari to call for records and to quash the cancellation order dated 22.05.2025 passed by respondent No.03 in respect of plot No.H-2, Sector-15 situated at Gorakhpur Industrial Development Authority (GIDA), Gorakhpur. (II). a writ, order or direction in the nature of prohibition, restraining the respondents from allotting Plot No.H-2, Sector-15 situated at Gorakhpur Industrial Development Authority (GIDA), Gorakhpur (which has been allotted to the petitioner) to any other third person. (III). a writ, order or direction in the nature of mandamus commanding the respondents to accept the outstanding dues from the petitioner and hand over physical possession of the Plot No.H-2, Sector-15 situated at Gorakhpur Industrial Development Authority (GIDA), Gorakhpur to the petitioner. (IV) issue any other writ, order or direction as this Hon'ble Court may deem fit and proper in the circumstances of the case. (V). award costs to the petitioner." 2 WRIC No. 23271 of 2025

3. It appears from the record that Gorakhpur Industrial Development Authority (GIDA), Gorakhpur had allotted a plot No.H-2 area 714.00 square meters situated in Sector No.15, District Gorakhpur to one Manoj Kumar Yadav vide allotment letter dated 24.06.2014 for establishing an industrial unit of plastic glass. On account of financial difficulties, he moved an application dated 28.02.2017 seeking permission to transfer the aforesaid plot in favour of M/s Prajjwal Industries (petitioner firm) for setting up an industrial unit of Grill, Channel etc. The petitioner firm deposited an amount of Rs.2,05,490/- (Rs.2,03,490/- as transfer fees + Rs.2,000/- processing fee) in the saving account of GIDA vide Chalan No.16429 dated 20.02.2017. Thereafter, the GIDA vide order dated 29.06.2017 had accorded permission to the original allottee to transfer the aforesaid plot in favour of the petitioner firm, with a condition that all the earlier terms and conditions would be applicable and the petitioner firm would also be liable to deposit the remaining amount/installments. As per the terms and conditions of the allotment, the petitioner firm was required to execute the lease deed and commence production within two years, subject to fulfilling certain financial and statutory conditions including payment of dues and production of temporary registration certificate.

4. It is claimed that in pursuance of the allotment letter, the petitioner firm had deposited Rs.16,00,000/- on different dates but on account of financial difficulties, it could not establish the industry within the stipulated time. The Chief Executive Officer, GIDA, Gorakhpur (respondent no.3) had issued a notice to the petitioner firm on 06.07.2021 for depositing the balance premium and other charges, amounting to Rs.20,29,466/-. By the impugned order dated 22.05.2025, the respondent no.3 had cancelled the allotment of the petitioner firm on the ground that several letters were written to the petitioner firm for depositing the amount and establishing the industrial unit but neither the petitioner firm had deposited the outstanding amount in the account of the SIDA nor taken possession of the land in question for executing the lease deed. Further, more than seven years have passed from the date of allotment and the petitioner firm had not shown any interest to establish the industry on the allotted plot.

5. Shri Ashutosh, learned counsel for the petitioner in this backdrop vehemently submitted that the petitioner firm is willing to set up the industrial unit over the land in question. The notice dated 06.07.2021 was not served on the petitioner firm and when it came to the knowledge of the petitioner firm, it has moved an application before the respondent authority on 15.05.2025. He submits that no sufficient opportunity had been afforded to the petitioner and it was not open to the respondent authority to have 3 WRIC No. 23271 of 2025 illegally and arbitrarily cancelled the allotment of the subject plot. The petitioner firm is ready to deposit the outstanding amount and comply with all terms and conditions of the allotment. The petitioner firm has also assured that it will start the factory within six months from the date of permission. However, without considering the application of the petitioners, the impugned order dated 22.05.2025 has been passed. He submits that the said land has not been allotted to any other party till date and the principles of natural justice were not adhered to in the instant matter. In support of his submission, he has placed reliance on the judgement of Apex Court in A.K. Kraipak vs. Union of India, AIR 1970 SC 150; Ridge vs. Baldwin (1970) AC 40; K.K. Balla vs. State of M.P. (2006) 3 SCC 581; MCD vs. Qimat Rai Gupta (2007) 7 SCC 309 and Dharampal Satyapal Ltd. vs. Dy. Commissioner of Central Excise (2015) 8 SCC 519.

6. Per contra, Shri Dhananjay Awasthi, learned counsel for respondent authority has vehemently opposed the writ petition and submitted that the GIDA vide order dated 29.06.2017 had accorded permission to the original allottee to transfer the subject plot in favour of the petitioner firm, subject to deposit of transfer charges and other charges. Despite repeated reminders and notices dated 06.01.2021, 14.06.2021, 09.12.2021, 23.06.2022, 20.12.2022, 14.06.2023, 23.06.2023, 07.08.2023, 08.07.2024, 26.06.2024, last notices dated 27.08.2024, 11.03.2025 and 16.04.2025, the petitioner firm neither cleared the outstanding dues nor established a functional industrial unit on the allotted plot. He further submits that the cancellation of the allotment of the plot in question is legal, justified and strictly in accordance with the conditions stipulated in the allotment letter. Lastly, it is urged that since the petitioner has failed to fulfill the essential terms and conditions of the allotment letter, the impugned order has been rightly passed. The present writ petition is devoid of merit and liable to be dismissed.

7. We have considered the rival contentions and perused the record.

8. For the complete and planned development of Eastern Uttar Pradesh, GIDA was incorporated by the State Government on 30th November 1989 under Uttar Pradesh Industrial Development Act 1976. The land is acquired by the State Government for the GIDA for development and allotment to the deserving applicants for setting up small and medium scale industries. The GIDA is entrusted with the responsibility of developing and maintaining requisite infrastructure, providing incentives, and creating a conducive environment for businesses to establish and expand their operations in eastern U.P.. In furtherance of these objectives, the GIDA also endeavours to generate employment opportunities and to support and strengthen the growth of existing industries in eastern Uttar Pradesh. 4 WRIC No. 23271 of 2025

9. It is an admitted position that the GIDA vide order dated 29.06.2017 had accorded permission to transfer the subject plot in favour of the petitioner firm for setting up an industry over the said plot, subject to specific terms and conditions. As indicated above, since 2017, at no point of time the petitioner firm had proceeded to make any construction over the plot in question. Nothing has been brought on record to indicate that at any point of time, the petitioner firm had made any effort to start the construction and to run the industry. It had not utilised the said plot for about seven years and further it did not make any effort for execution of the lease deed. The petitioner was under a contractual as well as statutory obligation to clear all outstanding dues, obtain necessary approvals, undertake construction, and commence industrial operations within the prescribed timeline. Despite repeated reminders and notices issued by GIDA on various occasions, the petitioner firm failed to ensure effective compliance and has not deposited the outstanding amount in pursuance of the aforesaid notices. Consequently, the GIDA had proceeded to cancel the allotment of plot in question on

22.05.2025.

10. The decision of Hon'ble Apex Court in Skyline Contractors Pvt. Ltd. v. State of U.P (2008) 8 SCC 265 squarely applies to the facts of the present case. In that matter, despite partial and delayed payments by the allottee, Hon'ble Supreme Court upheld the cancellation of allotment by NOIDA, holding that unilateral deposits made without prior approval or consent could not bind the authority.

11. In a recent judgment and order dated 11.07.2025, passed by a Coordinate Bench of this High Court in WRIT - C No. 21819 of 2025 (Smt. Savita Sharma vs. State of U.P. and 2 others), the cancellation of allotment by UPSIDA was upheld. The Court held that the restoration of a lease deed after fourteen successive failures to pay dues and violations of statutory provisions is not merely a matter of administrative discretion, but rather strikes at the very foundation of fiscal discipline, public interest, and the objectives of industrial policy. The relevant portion of the judgment is reproduced herein below:- "17. Successive failures to comply with lease terms also undermine public interest. Permitting continued retention of land by a non-performing allottee deprives deserving applicants of opportunities and slows down industrialization efforts. If such conduct is tolerated through writ jurisdiction, it may erode public confidence in the fairness and transparency of the State's land allocation framework.

18. Restoration of leases after repeated defaults may be viewed as 5 WRIC No. 23271 of 2025 arbitrary or ultra vires, particularly when it contravenes the express terms of the allotment letter or lease deed. The Supreme Court in Skyline Contractors Pvt. Ltd. (supra) have emphasized that deliberate non- compliance with payment schedules and lease conditions justifies cancellation of allotments. Courts have consistently held that leniency towards such defaulters undermines the integrity of the allotment process and sets a detrimental precedent.

19. A policy of restoring leases after long-term default would create a negative precedent for future allottees to disregard payment schedules and statutory obligations, anticipating eventual concessions. This undermines the deterrent effect of enforcement measures like cancellation and e- auction, weakening the overall governance framework of industrial land allocation.

20. In essence, restoring a lease deed after 14 successive failures to pay dues and violations of statutory provisions is not merely a question of administrative discretion; it strikes at the very foundation of fiscal discipline, public interest, and industrial policy objectives. The UPSIDA has acted in a manner that balances equity with accountability, ensuring that public resources are allocated to genuine entrepreneurs who can contribute to economic development and employment generation. Any contrary approach risks financial losses, delays in industrial growth, and erosion of public trust in the State's administrative fairness.

21. Therefore, having regard to the petitioner's repeated non-compliance with the demand notices dated 07.12.2020, 02.06.2021, 07.12.2021,

22.12.2021, 04.03.2022, 26.05.2022, 12.07.2022, 24.11.2022, 14.12.2022,

14.03.2023, 09.06.2023, 19.09.2023, 28.12.2023, and 07.03.2023, coupled with the violation of Clauses 15(a), 15(b), 15(c), and 23 of the lease deed dated 09.09.2020 as well as other provisions of the Urban Planning and Development Act, 1973, this Court finds no ground to extend indulgence in the exercise of its writ jurisdiction. The grounds urged by the petitioner do not merit interference under Article 226 of the Constitution of India, as UPSIDA's actions are neither arbitrary nor violative of the principles of natural justice.

22. Accordingly, for the reasons stated hereinabove, the writ petition fails on merits and is hereby dismissed. There shall be no order as to costs."

12. The argument regarding the lack of opportunity of hearing or violation of natural justice also does not hold weight in the present context. The cancellation was a consequence of non-compliance with a mandatory financial requirement and not based on any disputed fact that necessitated an 6 WRIC No. 23271 of 2025 adjudicatory process. The allotment provided a clear and automatic consequence for failure to deposit the required amount, and the repeated extensions provided by the authority only demonstrate that procedural fairness was afforded to the petitioner. In such circumstances, the principle of audi alteram partem cannot be stretched to override express contractual obligations.

13. In view of the above, the Court is of the considered opinion that the impugned order dated 22.05.2025 is neither arbitrary nor in violation of any statutory or constitutional provision. The petitioner, despite several opportunities and indulgence shown by GIDA, failed to discharge its core obligation under the scheme. There is no manifest illegality or procedural impropriety in the decision of the authority that would warrant judicial interference under Article 226 of the Constitution.

14. In the aforesaid facts and circumstances, we do not find any plausible reason to interfere with the impugned order. Accordingly, the writ petition is dismissed. October 10, 2025 RKP (Kunal Ravi Singh,J.) (Mahesh Chandra Tripathi,J.) RAKESH KUMAR PATEL High Court of Judicature at Allahabad