DCM LIMITED Vs. STATE OF HARYANA

JUDGEMENT

(1.) The writ petition challenges the action of the respondents to resume the land which had been assigned to the petitioner for what it perceived to be breach of covenant by the petitioner. It all started with the petitioner making a plea for approval of the Government to sell a portion of the vacant land which it had not utilized when the Financial Commissioner and Secretary to Government considered and rejected the plea by proceeding dated 27.04.1988. On 11.04.1989, the Government found that the action of management of the Mill in applying to the Government for sale showed that the work-sheds of the residential quarter or portion of both had become a liability for the management and the intended action for sale of land and buildings amounted to an expression to commit breach of covenants of the original deed of assignment. Referring to clause in the conveyance deed that if the breach was capable of rectification, the vendor would not resume the land unless issued a written notice requiring the vendee to rectify the breach within a reasonable time, the Governor of Haryana had authorized the Collector (Deputy Commissioner), Hisar to take appropriate action. By virtue of the operative clause 10 that enabled the State to demand a rectification for the breach on the pain of resumption of property, an opportunity had been given to the management to rectify the breach within a period of 45 days from the date of issue of notice. The Collector claimed that he had visited the property subsequent to the notice and had also appointed a Committee of Officers to visit the petitioner-Mill and submit a report in terms of verification of clauses in the conveyance deed to satisfy himself about the manner of upkeep of the Mill, as made possible through clause 5 of the Conveyance. The authority of the State to enter upon the premises after issuance of notice to ascertain that the vendee had performed and observed all the covenants of the conveyance came through clause 8. The Collector had found that within 400 acres of property that had been conveyed to the petitioner, an area of 250 acres remained unutilized and taking notice of the fact that the application of the management itself showed a desire of the management to sell the property, the Collector held that the management had not merely committed the breach of the covenants but that the breach was not capable of rectification by any stretch of imagination. A decision was, therefore, taken to resume the unutilized land through the impugned proceedings.

(2.) Some more details are necessary to examine the legality of the action of the respondents. On 17.11.1953, the Government of Punjab sanctioned the sale of 400 acres of land at a market price of 6 lakhs with a clear understanding that the factory would be set up and the property would be utilized for purpose of establishing an industrial unit that would pave way for providing employment and to promote industrial growth. It is not in dispute that after taking possession of the property, the petitioner-Company had incurred substantial expenses in leveling and developing the land for the setting up the industry and housing complex for the workers and employees. The industrial production commenced in the year 1954 with a capacity of 25000 spindles. The conveyance deed was executed subsequently on 03.09.1956 with full proprietary rights in favour of the petitioner-Company.

(3.) The petitioner has given the details of the developments made in plant and machinery by referring to the fact that an additional capacity of 40,000 spindles had been installed and it had also established a swimming pool for the employees and workers. In the year 1966-67, yet another Mill called C-Mill was set up with additional 16,000 spindles. In 1967-68, a ginning factory had been set up and in the year 1973, out of the extent of 400 acres that had been conveyed, 25 acres of land had been acquired by the Government from the petitioner-Company for laying bye-pass road. In the year 1975-76, a steam power plant had been set up due to power shortage, but trouble started between the years 1975 to 1983, when due to serious labour disputes about 5000 workers struck work. The Mill stood closed by persistent labour problems w.e.f. 03.06.1984. The decision of the petitioner to close down the Mill was upheld by this Court as well as the Hon'ble Supreme Court on the ground that the circumstances existed beyond the control of the establishment to run the Mill.