Aman Semi-Conductors (Pvt.) Ltd. vs Haryana State Industrial Development Corporation Ltd. & Anr.
Background
In 1994 the proprietor of Aman Semi-Conductors, a qualified engineer, applied to the Haryana State Industrial Development Corporation (HSIDC) for an industrial plot in Udyog Vihar, Gurgaon, to manufacture FM radio and audio components. He was allotted the plot in 1995 under an agreement requiring construction to start within six months and commercial production to begin within two years, failing which HSIDC could take the plot back. No construction ever started; the allottee blamed the absence of roads, electricity and other infrastructure and kept asking for extensions. After three show-cause notices, HSIDC resumed the plot in September 1998 and sent back the Rs 1,66,425 he had paid, which he refused. The District Consumer Forum and the State Commission ruled in his favour, but the National Commission (NCDRC) later sided with HSIDC.
Decision Breakdown
The Supreme Court upheld the NCDRC and dismissed the appeals. It found that the allottee had done nothing concrete in five years (no building plans submitted, no machinery procured, no registrations obtained) and his replies to the notices were vague, so the inference was that he never genuinely intended to set up the unit and was holding the plot speculatively. The condition that the plot must be used to set up an industry within a fixed time, on pain of resumption, is a valid and binding condition (following the earlier decision in Indu Kakkar), because industrial plots are allotted at concessional terms precisely to promote industry and jobs, not to enrich speculators. The natural-justice argument failed because three show-cause notices had been issued and largely ignored. Since HSIDC had held his money for 25 years after he returned the refund cheque, the Court directed HSIDC to refund Rs 1,66,425 with 6% annual interest from 18 September 1998, within six weeks.
Lesson Learnt
Subsidised land allotted by the government for a stated purpose comes with real strings attached. If you do not use it for that purpose within the agreed time, the authority can lawfully take it back, and consumer forums will not rescue an allottee who cannot show any genuine effort to comply.