Patna High Court
The Bihar Industrial Area Development Authority (BIADA)versusM/s Saraswati Lakshmi Litho Printing Press
- Decided
- Disposal
- ALLOWED
Holding
The Letters Patent Appeal is allowed; the cancellation of the allotment under the BIADA Act is upheld and the Single Judge’s order setting aside the cancellation is set aside.
Summary
The Bihar Industrial Area Development Authority (BIADA) allotted a 1,050 sq ft plot to M/s Saraswati Lakshmi Litho Printing Press in 1979. The unit ceased industrial activity after 1997 and the premises were used for residential purposes, leading to multiple cancellation notices and a final cancellation order on 19‑11‑2022, which was affirmed by an appeal on 03‑07‑2023. The petitioner filed a writ petition; the Single Judge set aside the cancellation, accepting the petitioner’s undertaking to restart production. On appeal, the Patna High Court held that the statutory provisions under Section 6(2)(a) of the Bihar Industrial Area Development Authority Act, 1974, requiring effective steps to establish industry, were complied with and that the petitioner’s undertaking could not override the clear statutory scheme. Consequently, the Letters Patent Appeal was allowed, the Single Judge’s order was set aside, and the cancellation of the allotment was upheld.
Issues considered
- The validity of the cancellation of the industrial land allotment under Section 6(2)(a) of the Bihar Industrial Area Development Authority Act, 1974.
- Whether the petitioner’s undertaking to commence industrial activity can override the statutory requirement for actual utilization of the land.
- Whether the Single Judge erred in setting aside the cancellation order and granting possession to the petitioner.
- Whether principles of natural justice and Nemo judex in causa sua were violated in the earlier orders.
Subjects
- industrial land allotment
- cancellation
- natural justice
- nemo judex
- undertaking
- possession
- BIADA Act
- letters patent appeal
- writ petition
- non‑utilization
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Letters Patent Appeal No.1399 of 2023
In
Civil Writ Jurisdiction Case No.10625 of 2023
======================================================
1. The Bihar Industrial Area Development Authority (BIADA) Udyog Bhawan,
Gandhi Maidan, Patna through its Managing Director.
2. The Managing Director, Bihar Industrial Area Development Authority
(BIADA), Udyog Bhawan, Gandhi Maidan, Patna.
3. The Joint Managing Director, Bihar Industrial Area Development Authority
(BIADA), Udyog Bhawan, Gandhi Maidan, Patna.
4. The Executive Director, North Bihar Industrial Area Development Authority
(BIADA), Udyog Bhawan, Gandhi Maidan, Patna, P.S.- Gandhi Maidan,
Patna- 800004.
5. The Deputy General Manager, Darbhanga Cluster, Bihar Industrial Area
Development Authority (BIADA).
6. The Area Incharge, Bihar Industrial Area Development Authority (BIADA),
Industrial Area- Bela, Darbhanga.
... ... Appellant/s
Versus
1. M/s Saraswati Lakshmi Litho Printing Press through its Proprietor Mrs.
Asha Devi, gender Female, aged 66 years, W/o Late Ajit Kumar Jha, Village
and Post Jogiara, District-Darbhanga, Bihar-857101.
2. The State of Bihar through the Chief Secretary, Government of Bihar, Old
Secretariat, Patna, Bihar.
3. The Additional Chief Secretary, Department of Industries, Government of
Bihar, Vikas Bhawan, Bailey Road, Patna.
4. The District Magistrate, Darbhanga, Collectorate, Laheriasarai, Darbhanga,
Bihar.
... ... Respondent/s
======================================================
Appearance :
For the Appellant/s : Mr. Avinash Kumar, Advocate
Mr. Kumar Priya Ranjan, (Dy. Retainer)
Mr. Sudarshan Bharadwaj, Advocate
Mr. Sandeep Kumar, Advocate
For the Respondent/s : Mr. Harsh Kaushal, Advocate
Mrs. Annapurna Sinha, Advocate
Mr. Abhishek Kumar Pandey, Advocate
======================================================
Patna High Court L.P.A No.1399 of 2023(5) dt.08-01-2026
2/13
CORAM: HONOURABLE MR. JUSTICE SUDHIR SINGH
and
HONOURABLE MR. JUSTICE PRAVEEN KUMAR
ORAL ORDER
(Per: HONOURABLE MR. JUSTICE SUDHIR SINGH)
5 08-01-2026 The present intra court appeal has been preferred
against the order dated 15.09.2023 passed in C.W.J.C. No.
10625 of 2023, whereby the learned Single Judge had set aside
the order dated 03.07.2023 of the Appellate Authority passed in
Appeal No. 198 of 2023 as well as the cancellation order passed
by the Joint Managing Director, BIADA and had granted an
opportunity to the writ petitioner to start commercial
production.
2. Learned counsel for the respondent-petitioner had
preferred the writ application for the following reliefs:
“(i) For quashing the order dated 3.7.23 passed
in Appeal Case No. 198/2022 communicated vide
Memo No. 3984 dated 7.7.23 by the Respondent No.
2 whereby and where under the Appeal filed by the
Petitioner has been dismissed in a mechanical
arbitrary, whimsical, pick and choose manner,
whereas the similarly situated allottees have been
given the benefits as are being given by the Hon’ ble
Court in C.W.J.C. No. 6883/2020. M/s. Umesh
Service Station vs. The State of Bihar and Ors., and
in terms of Appeal No. 76/2022.
(ii) For setting aside order bearing Memo No.
1029 dated 19.11.22 passed by the Respondent No.
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7. The Deputy General Manager, Muzaffarpur
Cluster, Bihar Industrial Area Development
Authority (BIADA). Muzaffarpur, (hereinafter
referred to as “BIADA”) whereby and where under
the allotment of land measuring an area of 1050 Sq.
Ft. for the establishment of Industry etc. within the
Industrial Area-Giddha has arbitrarily been
cancelled, since the reason recorded therein is non-
est, not sustainable that too being perverse and in
complete violation of the principles of natural justice
and against all. canons of justice.
(iii) For declaration and to hold that the
aforesaid impugned order dated 3.7.23 passed in
Appeal Case No. 198/2022 communicated vide
Memo No. 3984 dated 7.7.23 is illegal and in
contravention to the settled principles of law i.e.
Nemo Judex in Causa Sua (No one should be made a
judge on his own cause) as the impugned order vide
Memo No. 1029 dated 19.11.22 has been passed by
Respondent No. 7 The Deputy General Manager,
Muzaffarpur Cluster, Bihar Industrial Area
Development Authority (BIADA), Muzaffarpur and
the order dated 3.7.2023 passed in Appeal Case No.
198/2022 communicated vide Memo No. 3984 dated
7.7.23 passed by Respondent No. 2 Additional Chief
Secretary, Department of Industries who is
colourably holding the same post at the same time
and as such liable to be quashed on this ground
itself.
(iv) For a direction upon the Respondents to
give the benefits as are being given to the similarly
Patna High Court L.P.A No.1399 of 2023(5) dt.08-01-2026
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situated allottees in C.W.J.C. No. 13558/2022, C.W.J.C.
No. 12560/2022, C.W.J.C. No. 6883/2020, C.W.J.C. No.
13037/2022 and other analogous cases.
(v) For directing the respondents forthwith not to
take any coercive steps against the allotment of petitioner
till disposal of this writ application.
(vi) For any other relief or reliefs for which the
petitioner may be found entitled in the eye of law.”
3. The brief facts of the present case are that Plot No. C-
13, admeasuring 0.025 acre (approximately 1,050 sq. ft.), was
allotted to the respondent-petitioner by the Bihar Industrial Area
Development Authority (for brevity “BIADA”), and possession
was handed over vide Memo No. 3288 dated 19.11.1979. Lease
deeds were executed in 1979 and 1984, and a Certificate of
Registration dated 05.03.1983 was granted for establishment of
a printing press. The unit functioned up to the year 1997,
however, no material evidence has been produced to establish its
operation thereafter. On inspection, the premises were found to
be used for residential purposes, leading to issuance of notice
dated 07.08.2007 and cancellation of allotment vide Memo No.
2030 dated 29.08.2007. The said cancellation was set aside in
appeal vide order dated 27.08.2009, restoring the allotment
subject to revival of the unit within six months. Subsequently,
notices dated 30.07.2016 and 10.12.2016 were issued on
Patna High Court L.P.A No.1399 of 2023(5) dt.08-01-2026
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account of continued residential use. Further notices were issued
in 2019 and 2022 alleging unregistered non-industrial use.
Inspections conducted on 26.07.2022 and 28.07.2022 revealed
no industrial activity, leading to cancellation of allotment vide
Memo No. 1029 dated 19.11.2022. The said order was affirmed
in Appeal No. 198 of 2023 by order dated 03.07.2023,
considering the prolonged absence of any industrial activity on
the allotted plot.
4. The learned Single Judge took following facts in
consideration for deciding the issue raised in the writ
application:
5. Learned counsel for the petitioner has stated
that the petitioner has also filed an undertaking
before this Court which reads as under:-
“i) That I, hereby undertake that
within sixty/ninety days, petitioner will start
commercial production with BIADA handing
over possession of the premises to the
petitioner/recall of the order of cancellation.
With the petitioner failing to do, BIADA shall
take over vacant and peaceful possession of
the premises from the petitioner.
ii) That I also undertakes that within
six/nine months, petitioner shall make the unit
fully operational and functional at least to the
capacity of 80% for the product sanctioned
and allowed to be manufactured as per the
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original terms of allotment.
iii) That also undertakes that I shall
make itself compliant with all mandatory
statutory requirements, including the ones
protecting the Interest of the employees and I
shall clear all other statutory dues including
G.S.T./electricity charges etc in this period.
(iv) That I further undertake that I
shall in the event of failure on my part to
comply with the undertaking, BIADA shall
take over vacant and peaceful possession of
the premises from the petitioner with liberty
for further allotment to 3rd party, with the
petitioner losing all rights therein.
(v) That I further undertake that I shall
be liable for initiation of proceedings for
contempt for having violated the undertaking
furnished to the Court.”
6. Having regard to the above said undertakings
which is reproduced above and the judgment of this
Hon’ble Court passed in C.W.J.C. No. 15567 of
2022 dated 02.12.2022, wherein this Hon’ble Court
duly taking into account the undertaking given by
the petitioner therein has set aside the order of the
appellate authority as well as the order of
cancellation passed by the BIADA and granted an
opportunity to the petitioner to start its commercial
production.
7. Having regard to the above and also the
submissions made by the learned counsel for the
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BIADA, this Court is of the considered opinion that
the ends of Justice would be met if, the undertaking
given by the petitioner is accepted and the petitioner
given an opportunity of starting commercial
production. The Court makes the following orders:-
8(i). As it is stated that possession has been
taken by the BIADA, the same shall be handed over to
the petitioner immediately after the receipt of this
order. The petitioner shall then furnish a bank
guarantee for an amount of Rs. 50,000/- within one
week from the date of handing over the possession.
Thereafter, the petitioner shall clear all the outstanding
dues, if any of the BIADA within a period of two weeks
thereof. The petitioner shall start the commercial
production within sixty/ninety days from the date of
handing over the possession and start manufacturing
plan as approved by the Bihar Industries Commercial
Policy, 2016.
8(ii). Consequence of breach thereof, including
initiation of proceedings for contempt for having
violated the undertaking furnished before this Court
stands explained to the petitioner through the learned
counsel.
8.(iii) Undertaking of the petitioner dated
20.07.2023 is accepted and taken on record.
8.(iv) Petitioner has been made aware of the
consequences of breach thereof, including initiation of
proceedings for contempt;
8.(v) In the event of default of the undertaking,
petitioner shall hand over vacant and peaceful
Patna High Court L.P.A No.1399 of 2023(5) dt.08-01-2026
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possession of the allotted property to BIADA within a
period of two weeks;
8.(vi) It is made clear that, in case the petitioner
fails to start the full commercial production within the
stipulated time and also fails to hand over the vacant
and peaceful possession of the allotted property to
BIADA within a period of two weeks thereof, the
authorities of the BIADA are free to take possession of
the premises in question.
8.(vii) Consequently, the order dated 19.11.2022
passed by respondent no. 7, the Deputy General
Manager, Dharbhanga Cluster, Bihar Industrial Area
Development Authority (BIADA), issued vide Memo
No. 1029 (Annexure-P/10) and order dated 03.07.2023
passed in Appeal Case No. 198 of 2023 communicated
vide Memo No. 3984 dated 07.07.2023 by Respondent
No. 2, the Additional Chief Secretary-cum-the
Appellate Authority, Department of Industry,
Government of Bihar contained (Annexure-P/13) are
accordingly quashed and set aside.”
5. The learned counsel for the appellant submits that the
premium industrial land admeasuring 1,050 sq. ft., allotted in
the year 1978, remained non-functional after 1997 and was
rendered redundant for industrial purposes for a prolonged
period. It is further submitted that repeated inspections revealed
absence of any industrial activity on the allotted plot and that
the premises was being used for residential purposes as well as
for storage of unregistered goods. Notices were issued from
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time to time, including in the years 2007, 2016, 2019 and 2022,
and despite conditional restoration of allotment in the year 2009
with a direction to revive the unit within six months, the writ
petitioner failed to comply with the terms of allotment and the
lease deed. It is also submitted that the undertaking furnished
before the learned Single Judge does not inspire confidence and
was merely an attempt to retain possession of the industrial plot
at a subsidised rate without utilising it for the purpose for which
it was allotted.
6. Learned counsel appearing on behalf of the
respondent-writ petitioner submits that there is no infirmity in
the impugned order passed by the learned Single Judge,
inasmuch as the same was delivered after due and careful
consideration of the materials available on record, as well as the
undertaking furnished on behalf of the writ petitioner.
7. On the last date of hearing, a specific submission was
made on behalf of the respondent–writ petitioner that the
industrial unit in question had continued to remain functional
even after the year 1997 and was operational till the issuance of
the cancellation order. Taking note of the said submission, this
Hon’ble Court, was pleased to direct the respondent–writ
petitioner to produce relevant tax receipts/documents to
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substantiate the claim that the unit was in fact running and
functional during the relevant period, vide order dated
02.12.2025, which reads as:
“5. Learned counsel for the respondent is directed to
file a counter affidavit bringing on record the
income tax return, sales tax return and value added
tax return of Respondent No. 1 to show that the unit
in question was running till recent time.”
8. However, upon perusal of the records, it transpires
that till date no income tax return, sales tax return, value added
tax return or any other documentary material has been placed on
record to substantiate the claim that the industrial unit was
functional during the relevant period, despite the specific
direction issued by this Hon’ble Court vide order dated
02.12.2025.
9. Upon perusal of records, it is apparent that the
industrial unit allotted to M/s Saraswati Laxmi Litho Printing
Press, Industrial Area, Bela, under Plot No. C-13 (750 sq. ft.)
along with 300 sq. ft. allotted for subsequent expansions, was
not being used for the industrial purposes for which the land had
originally been allotted. Despite repeated inspections and
issuance of notices on several occasions, it is evident that the
land was being used for residential purposes, storage of
wedding-related goods, and other non-industrial activities. The
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competent authority, vide office orders dated 29.04.2022 and
15.07.2022, had directed the cancellation of the allotment of
0.025 acres of additional land on the ground of non-utilization
for industrial purposes. Subsequent inspections carried out on
26.07.2022, 28.07.2022, and 12.10.2022 further confirmed that
industrial activity had not commenced and the premises
continued to be used for residential purposes.
10. The records further disclose that the allottee was
repeatedly afforded adequate opportunities to rectify the defects
and resume industrial activity; however, no compliance
whatsoever was made. In view of the above, the competent
authority, in exercise of powers conferred under Section 6(2)(a)
of the Bihar Industrial Area Development Authority Act, 1974,
and following the relevant rules, cancelled the allotment of the
aforementioned plots and directed that the land would revert to
the possession of the competent authority, with no claim for
future allotment or usage by the allottee being admissible. The
Bihar Industrial Area Development Authority Act, 1974, Section
6(2)(a) is reproduced herein below:
“2. (a) In case necessary effective steps are
not taken within the fixed period to establish the
industry, the authority shall in such condition,
cancel the allotment of allotted plot/shed and also
forfeit the amount deposited in this connection. The
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authority shall, before cancelling the allotment allow
one month time to the allottee to put up his case. the
allottee on being dissatisfied with the order of the
Authority may file an appeal to the State
Government within one month and the State
Government shall, after due consideration dispose it
of within two months from the date of receipt of the
appeal.”
11. It is further observed that the learned Single Judge,
while allowing the writ petition, relied upon the undertaking
furnished by the writ petitioner to start commercial production.
However, the undertaking, in the present facts and
circumstances, cannot override the clear statutory scheme and
the repeated failures of the writ petitioner to use the allotted
land for industrial purposes. The allottee had been repeatedly
granted opportunities by the authority to revive the industrial
unit and comply with statutory obligations, but they failed to do
so, and instead continued using the premises for residential and
other non-industrial purposes.
12. In such circumstances the order of the learned
Single Judge, allowing the writ petition and setting aside the
cancellation, cannot be sustained. The cancellation of allotment
vide office order dated 19.11.2022, as well as the affirmation
thereof in Appeal No. 198 of 2023, was in strict compliance
with the statutory provisions, including Section 6(2)(a) of the
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BIADA Act, 1974, and the terms and conditions of allotment.
13. Accordingly, the present Letters Patent Appeal is
allowed, and the orders of the learned Single Judge dated
15.09.2023 in C.W.J.C. No. 10625 of 2023 are set aside. The
allotment of Plot No. C-13, Industrial Area, Bela, as cancelled
by the competent authority, shall remain cancelled, and the writ
petitioner shall have no claim over the land. The competent
authority is free to take possession of the premises and deal with
the land in accordance with law.
14. Pending application(s), if any, shall stand disposed of.
(Sudhir Singh, J)
(Praveen Kumar, J)
Anushka/-
U
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