Patna High Court

The Managing Director, Bihar Industrial Area Development AuthorityversusM/s Ashoka Foundry

Decided: 6 July 2026
Disposal: DISMISSED
Bench: ACTING RANJAN KUMAR JHA

Holding

The appellate court dismissed the appeal, holding that the Single Judge's discretionary acceptance of the undertaking with conditions was not arbitrary or perverse and therefore could not be interfered with.

Summary

The Bihar Industrial Area Development Authority (BIADA) cancelled the allotment of a 6,000 sq. ft. industrial plot to M/s Ashoka Foundry after the firm failed to commence production despite multiple notices and a One‑Time Amnesty Scheme undertaking. The Single Judge set aside the cancellation, accepting the firm's undertaking and directing it to start commercial production within a stipulated period, while warning of contempt for breach. BIADA appealed, arguing the judgment was arbitrary and that the undertaking was unreliable given the firm's history. The Patna High Court held that the Single Judge had exercised discretion reasonably, imposing safeguards and conditions, and that an undertaking before a court carries binding legal consequences. Consequently, the appellate court found no patent illegality or perverse exercise of discretion and dismissed the appeal.

Issues considered

Whether the Single Judge's order setting aside the cancellation of the industrial plot on the basis of the respondent's undertaking is legally infirm and warrants interference in an intra‑court appeal
Whether the discretion exercised by the Single Judge was arbitrary, capricious, or perverse

Legislation cited

BIADA Act

Subjects

industrial allotment
cancellation of lease
undertaking before court
writ jurisdiction
intra‑court appeal
discretionary power
contempt of court
one‑time amnesty scheme
public resource

Judgment

IN THE HIGH COURT OF JUDICATURE AT PATNA
Letters Patent Appeal No.76 of 2024
In
Civil Writ Jurisdiction Case No.4556 of 2023
======================================================
1. The Managing Director, Bihar Industrial Area Development Authority
Udyog Bhawan, Gandhi Maidan, Patna.
2. The Joint Managing Director, Bihar Industrial Area Development Authority,
Udyog Bhawan, Gandhi Maidan, Patna.
3. The Deputy General Manager, Bihar Industrial Area Development Authority,
Patna Cluster, Udyog Bhawan, Gandhi Maidan, Patna.

... ... Appellants
Versus

1. M/s Ashoka Foundry a partnership firm having its office at Plot No. -6(P)
and C-7, Patliputra Industrial Area, Patna through its Partner Viishal Sahay,
aged about 47 years, Male, son of Late Shyam Sunder Sahay, resident of 10,
Lord Sinha Road, 15A Ankur Building, Middleton Row, P.S.-Shakespeare
Sarani, District-Kolkata, West Bengal.
2. The State of Bihar through the Principal Secretary, Department of Industries,
Government of Bihar, Patna.

... ... Respondents
======================================================
Appearance :
For the Appellants : Mr. Sanchay Shrivastava, Advocate
Mr. Sushant Shrivastava, Advocate
For the Respondents : Mr.Yogendra Pd. Sinha, AAG-7
======================================================
CORAM: HONOURABLE MR. JUSTICE SUDHIR SINGH
and
HONOURABLE MR. JUSTICE RANJAN KUMAR JHA
ORAL JUDGMENT
(Per: HONOURABLE MR. JUSTICE SUDHIR SINGH)

Date : 06-07-2026
Heard learned counsel for the parties.

2. The present intra court appeal has been preferred

against the order dated 11.08.2023 passed by the learned Single

Judge in C.W.J.C. No. 4556 of 2023, whereby the writ petition

preferred by the writ petitioner (respondent No. 1 herein) came to

be allowed.
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3. The facts, in brief, are that Plot No. 6(P) and C-7

admeasuring 6,000 sq. ft. was transferred by the appellant-

authority in favour of M/s Vikas Industries vide Memo No. 122

dated 23.01.1996 for establishment of a hand pump manufacturing

unit. Subsequently, the constitution of the firm was changed from

proprietorship to partnership and the name of the unit was changed

to M/s Ashoka Foundry, which was approved by the appellant-

authority vide Letter No. 998 dated 25.07.1996. The firm was

thereafter reconstituted in the year 1999.

4. It is the case of the appellants that despite the

allotment having remained in force for several years, the industrial

unit failed to commence and sustain industrial production. Upon

inspections conducted by the authority, the unit was repeatedly

found non-functional, whereafter notices were issued to the

respondent, including notices dated 08.02.2020 and 01.12.2021,

calling upon it to explain the continued non-utilisation of the

allotted land.

5. The respondent was thereafter extended the benefit of

the One-Time Amnesty Scheme vide communication dated

20.04.2022. In response, the respondent furnished an affidavit

undertaking to commence trial production within six months and

commercial production within twelve months, with at least 75%

production capacity. However, subsequent inspections conducted
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on 05.08.2022, 02.11.2022 and 14.12.2022 revealed that although

a shed had been constructed and certain machinery installed, no

manufacturing or industrial activity had commenced.

6. In view of the respondent’s failure to comply with the

conditions of allotment as well as the undertaking furnished under

the Amnesty Scheme, the appellant-authority cancelled the

allotment of the plot vide Memo No. 825 dated 29.12.2022. The

appeal preferred by the respondent against the said cancellation,

being Appeal No. 85 of 2023, was dismissed by the Appellate

Authority vide order dated 07.03.2023, holding that no industrial

activity had been carried on the allotted plot for a considerable

period.

7. Aggrieved thereby, the respondent instituted C.W.J.C.

No. 4556 of 2023. The learned Single Judge, by judgment dated

11.08.2023, has observed as follows:

“8. Having regard to the above said
undertakings which is reproduced above and
also the judgement of the Division Bench 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 court as
well as the order passed by the BIADA and
granted an opportunity to the petitioner to start
commercial production.
Patna High Court L.P.A No.76 of 2024 dt.06-07-2026
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9. Having regard to the same and also the
submissions made by the learned counsel for
‘the BIADA’, who stated that the present writ
petition can be disposed off in terms of the
undertaking so furnished. The undertaking is
accepted and taken on record.

10. If the possession has been taken by ‘the
BIADA’, the same shall be handed-over to the
petitioner and the petitioner shall start the
commercial production within sixty days and
start manufacturing plan as approved by the
Bihar Industries Commercial Policy, 2016.

11. Consequence of breach thereof, including
initiation of proceedings for contempt having
violated the undertaking furnished before this
Court stands explained to the petitioner
through the learned counsel.

12. As such, the present petition is allowed in
the following terms:-

(a) Undertaking of the petitioner dated
05.08.2023 is accepted and taken on record.

(b) Petitioner has been made aware of the
consequences of breach thereof, including
initiation of proceedings for contempt;

(c) In the event of default of the undertaking,
petitioner shall hand-over vacant and peaceful
possession of the allotted property to ‘the
BIADA’ within a period of two weeks;

(d) It is made clear that, in case, the petitioner
fails to start the commercial production within
the stipulated time and also fails to hand over
Patna High Court L.P.A No.76 of 2024 dt.06-07-2026
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the vacant and peaceful possession of the
allotted property to the BIADA within a period
of two weeks thereof. The authorities of the
BIADA are free to take possession of the
premises in question.

(e) Order dated 07.03.2023 passed by the
Principal Secretary, Department of Industries,
Government of Bihar, Patna in Appeal Case
No. 85 of 2023 and order dated 23.12.2022
passed by Joint Managing Director, BIADA
communicated vide order contained in Memo
No. 825 dated 29.12.2022 (Annexure-4) are
accordingly quashed and set aside.”

8. Learned counsel for the appellants submits that the

learned Single Judge errs in setting aside the cancellation order

solely on the basis of the undertaking furnished by the writ-

petitioner (respondent no. 1 herein), despite the admitted fact that

no industrial activity is commenced on the allotted plot since its

allotment in 1996.

9. It is further submitted that repeated inspections

conducted by the appellant-authority find the unit to be non-

functional and, despite several notices and the benefit of the One-

Time Amnesty Scheme, the respondent fails to commence

production even in terms of its own affidavit. Consequently, the

cancellation of the allotment and dismissal of the statutory appeal

are legal, justified and in accordance with law.
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10. Learned counsel further submits that the industrial

plot is a scarce public resource meant to promote industrialisation

and cannot be permitted to remain idle indefinitely. It is, therefore,

prayed that the impugned judgment be set aside.

11. Per contra, learned counsel for the respondents

submits that the learned Single Judge rightly exercised writ

jurisdiction after considering the facts and circumstances of the

case. It is contended that no ground for interference is made out in

the present intra-court appeal.

12. The limited issue which arises for consideration

before this Court is as to whether the impugned judgment and

order of the learned Single Judge, whereby the cancellation order

and the appellate order are set aside on the basis of the undertaking

furnished by the writ petitioner, suffers from any legal infirmity

warranting interference by this Court in exercise of its intra-court

appellate jurisdiction.

13. The scope of interference in an intra-court appeal is

well settled. Though the appellate jurisdiction is co-extensive,

interference with an order passed by the learned Single Judge in

exercise of writ jurisdiction is not warranted merely because

another view is possible. Unless the exercise of discretion is

shown to be arbitrary, perverse, contrary to law, or based on an
Patna High Court L.P.A No.76 of 2024 dt.06-07-2026
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erroneous appreciation of material facts, the appellate court

ordinarily refrains from substituting its own view.

14. In this regard, the Hon’ble Supreme Court in

Wander Ltd. v. Antox India (P) Ltd., reported in 1990 SCC

OnLine SC 490 has held that an appellate court would not

interfere with the exercise of discretion merely because it is

possible to take a different view. Interference is justified only

when the discretion is shown to have been exercised arbitrarily,

capriciously, perversely or in disregard of settled principles of law.

The relevant part of the said order reads as follows:

14. The appeals before the Division Bench
were against the exercise of discretion by
the Single Judge. In such appeals, the
appellate court will not interfere with the
exercise of discretion of the court of first
instance and substitute its own discretion
except where the discretion has been shown
to have been exercised arbitrarily, or
capriciously or perversely or where the
court had ignored the settled principles of
law regulating grant or refusal of
interlocutory injunctions. An appeal against
exercise of discretion is said to be an
appeal on principle. Appellate court will
not reassess the material and seek to reach
a conclusion different from the one reached
by the court below if the one reached by
that court was reasonably possible on the
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material. The appellate court would
normally not be justified in interfering with
the exercise of discretion under appeal
solely on the ground that if it had
considered the matter at the trial stage it
would have come to a contrary conclusion.
If the discretion has been exercised by the
trial court reasonably and in a judicial
manner the fact that the appellate court
would have taken a different view may not
justify interference with the trial court's
exercise of discretion. After referring to
these principles Gajendragadkar, J. in
Printers (Mysore) Private Ltd. v. Pothan
Joseph...”

15. Examining the impugned judgment on the

touchstone of the aforesaid principles, this Court finds that the

learned Single Judge did not mechanically accept the undertaking

furnished by the respondent. Rather, after considering the

undertaking and the stand taken by the appellant-BIADA, the

learned Single Judge granted the relief by imposing reasonable

conditions. The respondent herein was directed to commence

commercial production within the stipulated period of 60/90 days,

and was also made aware of the consequences of breach of the

undertaking. Further, in the event of default BIADA was left free

to resume possession. Thus, in our view the relief granted is

neither unconditional nor absolute.
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16. The contention of the appellants that the undertaking

does not inspire confidence in view of the respondent’s past

conduct also does not persuade this Court to take a different view.

An undertaking furnished before a constitutional court is not an

empty formality but carries with it binding legal consequences.

The Hon’ble Supreme Court in Babu Ram Gupta v. Sudhir

Bhasin, reported in (1980) 3 SCC 47 explains the sanctity

attached to an undertaking given to a court and the consequences

flowing from its breach. Therefore, the apprehension expressed by

the appellants already stands adequately addressed by the

safeguards incorporated by the learned Single Judge in the

operative part of the judgment itself. The relevant part of the said

order reads as follows:

“7.. It is manifest that any person
appearing before the Court can give an
undertaking in two ways: (1) that he files
an application or an affidavit clearly
setting out the undertaking given by him to
Court, or (2) by a clear and express oral
undertaking given by the contemner and
incorporated by the Court in its order. If
any of these conditions are satisfied then a
wilful breach of the undertaking would
doubtless amount to an offence under the
Act.... There is a clear-cut distinction
between a compromise arrived at between
the parties or a consent order passed by the
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court at the instance of the parties and a
clear and categorical undertaking given by
any of the parties. In the former, if there is
violation of the compromise or the order no
question of contempt of court arises, but the
party has a right to enforce the order or the
compromise by either executing the order
or getting an injunction from the court.”

17. The present case is not a case where the learned

Single Judge by virtue of impugned order has created any absolute

or vested right in favour of the writ petitioner, rather considering

his undertaking the learned Single judge has granted an

opportunity for a limited period, enabling the writ petitioner to

start production. At the same time the consequences in case of

breach of undertaking is also indicated in the impugned order.

Such exercise of discretion cannot be characterised as arbitrary,

irrational or perverse merely because the appellants seek

immediate cancellation.

18. The appellants are also unable to demonstrate that

the impugned judgment violates any mandatory statutory provision

under the BIADA Act, the Regulations or the terms and conditions

governing allotment. The learned Single Judge merely moulds the

relief in exercise of equitable jurisdiction while sufficiently

safeguarding the rights of BIADA. This Court does not find the
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exercise of such discretion to be contrary to law or so

unreasonable as to warrant appellate interference.

19. The issue, therefore, is answered against the

appellants.

20. In view of the aforesaid discussions, this Court is

satisfied that the impugned judgment represents a plausible,

equitable and legally sustainable exercise of writ jurisdiction. No

patent illegality, perversity or jurisdictional error is shown so as to

justify interference in the present intra-court appeal.

21. Accordingly, the appeal is devoid of merit and is

dismissed.

22. Pending application(s), if any, shall also stand

disposed of.

(Sudhir Singh, J.)

(Ranjan Kumar Jha, J.)

sujit/-
AFR/NAFR N.A.F.R.
CAV DATE N.A.
Uploading Date 10.07.2026
Transmission Date N.A.

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