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LATEST NEWS UPDATES | Court quashes allotment of land on lease by GIDC

Court quashes allotment of land on lease by GIDC

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published Published on Nov 27, 2010   modified Modified on Nov 27, 2010

The Bombay High Court at Goa on Friday quashed the allotment of land on lease by the State-owned industry promotion body to the promoters of seven Special Economic Zone(SEZ) projects upholding the State Government's power to scrap the SEZ policy and the projects in public interest.

A Bench comprising Justice A. S. Oka and Justice F. M. Reis, inter alia ruled that that there was lack of fairness and transparency in allotment of land by the Goa Industrial Development Corporation (GIDC). Moreover, the action of allotment showed lack of application of mind. The action was thus illegal, arbitrary and unreasonable. However, it ordered the status quo be maintained for four months from the day of judgment as regards the lands in question by the GIDC and the petitioners.

Simultaneously, it observed that their applications can be considered afresh by the GIDC for allotment of the same lands for any lawful purpose except for setting up of SEZs.

These SEZ projects include three which were notified by the Central SEZ authorities, and four others which were earlier recommended by the State government; but their recommendations were withdrawn after scrapping the SEZ policy in December 2008.

Over 30 lakh square metres of land at different industrial estates was allotted to the seven promoters — K. Raheja & Corporation Pvt. Ltd., Maxgrow Finlease Pvt. Ltd., Meditab Specialties Pvt. Ltd., Peninsula Pharma Research Centre, The Planetview Mercantile Co. Ltd., Inox Mercantile Company Pvt. Ltd., and Paradigm Logistics & Distribution Pvt. Ltd.

The Court ruled that the contention of the parties that the State government's decision to scrap the SEZ policy and SEZ projects cannot be considered an arbitrary or illegal decision. The decision was guided by public interest and, therefore, the Court held that it would be inequitable to hold the State government or the GIDC bound by its alleged promise and representation.

If fresh allotment cannot be made, the GIDC will have to refund the amounts received towards deposit, lease premium, interest and rent at the time of the companies handing over the possession of lands, the Court said.

The Court has said that in those cases where approvals are not granted under the SEZ Act, it is obvious that the proposals cannot be processed further as the government of Goa has withdrawn the recommendation. Therefore, no fault can be found with the Central government holding that such proposals shall be treated as dropped in as much as the recommendation is necessary for grant of the approval. Clarifying its order for status quo for four months, the Court said petitioners shall not carry on any further constructions on the said lands and shall not hereafter create any third-party rights in respect of the lands for a period of four months. The GIDC should not dispossess the petitioners for four months and shall not make allotments of the said lands to any third parties during the said period. If within four months no fresh allotment is made by the GIDC, on expiry of said four months, it is open for the GIDC to take steps in accordance with law to take possession of the said lands.


The Hindu, 27 November, 2010, http://www.thehindu.com/todays-paper/tp-national/article916408.ece


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