Bombay HC refuses to quash allotment of plot to M&M

The Bombay High Court has dismissed a petition filed by Zenith Metaplast Pvt Ltd praying for allotment of a three-acre plot in Nashik to itself and cancellation of adjacent plots allotted to Mahindra & Mahindra Ltd and an industrialist.

The court observed that the Maharashtra Government and the Maharashtra Industrial Development Corporation (MIDC) had acted in the interests of the State while allotting the adjacent plots admeasuring 17 acres and six acres to Mahindra & Mahindra and Nashik-based industrialist Abhay Kulkarni respectively.

Zenith Metaplast also sought a writ of certiorari to quash the communications dated December 16, 2005, and June 22, 2006, rejecting its application for the allotment of a plot admeasuring about 3 acres in the same MIDC area.

The order is considered significant against the backdrop of an MoU signed by the Maharashtra Government and Mahindra and Mahindra on June 15, 2005, in respect of commissioning of Rs 700-crore project at Nashik for manufacture of “Logan” car.

“Having been through the records, we are satisfied that there is no arbitrariness in the decision. The decision to allot the said plots to Mahindra & Mahindra and Abhay Kulkarni was taken after due consideration of all the facts and circumstances of the case,” observed Justices R.Y. Ganoo and S.J. Vajifdar in their recent order.

“MIDC and the state of Maharashtra considered the application of Mahindra & Mahindra and Abhay Kulkarni to be, inter-alia, in public interest for the benefit of the state.

We find no reason to condemn this decision as arbitrary for any reason whatsoever,” the judges observed.

The MIDC contended that the petitioner, over the years, had been allotted eight plots of land in the said area, but the full potential of even these plots was not exploited by the petitioner and therefore it has no case.

“The details of these eight plots and the extent to which they have been exploited have been furnished. The petitioner has not denied these statements or offered any cogent explanation for accumulating plots and not using them,” the Bench noted.

The judges noted that the petitioner was aware of the allotment in favour of Mahindra & Mahindra prior to March 15, 2006, as is evident from the letter dated March 15, 2006, addressed by it to MIDC. “The petitioner never objected to the allotment of the plot by MIDC in favour of Mahindra & Mahindra. This is evident from the correspondence addressed by the petitioner which we have already referred to.”

By the letter dated March 15, 2006, the petitioner said that it could be allotted a plot “without disturbing the requirement of Mahindra & Mahindra”. By the letter dated April, 3, 2006, addressed to the MIDC’s Chairman, the petitioner requested MIDC to issue “the balance list of open space No.8 of 24000 square meters left after allotment to Mahindra and Mahindra”.

The petitioner, therefore, did not seek to disturb the allotment in favour of Mahindra & Mahindra, the judges further noted.

It was only by the letters dated October 3, 2006, and October 10, 2006, that the petitioner challenged the allotment in favour of Mahindra & Mahindra. This challenge was also essentially only on the basis of MIDC’s circular dated January 25, 1994, and not on the basis that the allotment was not in accordance with the procedure or unfair, the Bench observed.

As the result, therefore, Mahindra & Mahindra commenced the process as far back as November 23, 2005. There were detailed negotiations between the Government of Maharashtra, MIDC and Mahindra & Mahindra with regards to the allotment for the mega project, the court noted.

Crores of rupees have been spent by this company in respect thereof, including the payment of premium of about Rs 7.51 crore. The company also had the option to set up the mega project in two other states viz. Andhra Pradesh and Uttarakhand, the judges observed.

“The petitioner took no steps to challenge the allotment although it knew about the same prior to March 15, 2006. We are not inclined to exercise our jurisdiction under Article 226 to annul the allotment in such circumstances,” the judges noted.