I t IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI FRIDAY, THE TWENTY FIFTH DAY OF APRIL TWO THOUSAND AND TWENTY FIVE PRESENT HONOURABLE THE CHIEF JUSTICE SRI DHIRAJ SINGH THAKUR AND THE HONOURABLE SRI JUSTICE RAVI CHEEMALAPATI WRIT APPEAL NO: 447 OF 2025 Writ Appeal under clause 15 of the Letters Patent against the Order in W.P.No.8055 of 2019, dt.04.04.2025, on the file of the High Court. Between; Steel Exchange India Ltd., Corporate Office. 103, Vizag Profile Towers Kurumannapalem, Visakhapatnam, Rep. by its Director Bandi Mohit Sai Kumar. ...APPELLANT(S) AND 1. Andhra Pradesh Industrial Infrastructure Corporation Ltd., APIIC Industrial Park, Mangalagiri, Guntur District, Rep. by its Vice Chairman and Managing Director The Zonal Manager, Andhra Pradesh Industrial Infrastructure Corporation Ltd., Industrial Estate, Kusalapuram, Srikakulam District, A.P. The State of Andhra Pradesh, Rep. by its Principal Secretary, Industries and Commerce Department, Secretariat Velagapudi, Amaravathi, Guntur District, A.P. 2. 3. ...RESPONDENTS lA NO: 1 OF 2025 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay the directions issued in Para-25 of the Order, dt.04.04.2025 in W.P.No.8055 of 2019, pending disposal of the Writ Appeal. lA NO: 2 OF 2025 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the Respondents not to take coercive steps against the Appellant Company, in relation to the land allotted to it i.e. an extent of Ac.80.00 cts, covering plot 80 acres (comprised in Plot Nos.236 to 243, 250 to 252, 295 to 300, 304, 305, 311 to 316 and 321 to 324, totally 29 plots) in API 1C Growth Centre, Bobbili, Vizianagaram District, covered by the Provisional Allotment Letter, dt.06.08.2007 and Final Allotment Letter, dt.06.11.2007, issued on behalf of the APIIC, pending disposal of the Writ Appeal. Counsel for the Appellant: SRI P. ROY REDDY Counsel for the Respondents ; SRI SANTHI CHANDRA SC FOR APIIC The Court made the following: JUDGMENT Bench Sr.No:-28 [3483] APHC010198822025 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI SEH OTO.r WRIT APPEAL NO: 447 of 2025 Steel Exchange India Ltd. ...Appellant Vs. Andhra Pradesh Industrial Infrastructure Corporation Ltd and others ...Respondents ********** Advocate for Appellant Mr. P. Roy Reddy Advocates for Respondents Mr. Santhi Chandra, Standing Counsel for APIIC CORAM :THE CHIEF JUSTICE DHIRAJ SINGH THAKUR SRI JUSTICE RAVI CHEEMALAPATI : 25th April 2025 DATE Per DHIRAJ SINGH THAKUR, n.l- The present Writ Appeal, under Clause 15 of the Letters been preferred against the judgment and order, W.P.No.8055 of 2019. By virtue of the judgment and petition filed by the petitioner was dismissed with Patent, has dated 04.04.2025, passed in order impugned, the writ certain directions. 2. Briefly stated, the material facts are as under: 2 HCJ & RCJ W A.No.447 of 2025 By virtue of the provisional allotment order, dated 06.08.2007, Ac.80.00 cts of land came to be allotted to the petitioner/appellant herein by the Andhra Pradesh Industrial Infrastructure Corporation Limited (in short, ‘APIIC’) at a tentative cost of Rs.100/- per Sq.mtr. for a total amount of Rs.3,23,76,000/- for setting up an Integrated Mini Steel Plant. 3. Pursuant to the allotment order, an agreement to sell was executed and possession handed over to the petitioner upon payment of the specified amount. In the allotment order, it was made clear that the allottee would be responsible for getting the power supply to the unit and would not claim any rebate/reduction in the cost from the APIIC for any delay in getting the power supply from the Andhra Pradesh Transmission Corporation (in short, ‘AP Transco’). According to Clauses 17 and 18 of the order of allotment, the petitioner was obliged to commence construction of the factory building after getting the building plan approved from the competent authority within months of being put in possession and further that the petitioner should go into the regular commercial production, duly erecting the machinery and obtaining regular power supply connection within two years after being put possession of the allotted plots. 4. SIX in 5. Clauses 17, 18 and 19 of the allotment order are relevant and are reproduced below; 3 HCJ & RCJ W,A No,447 of 2025 a) You should commence construction of factory building duly obtaining building approval plans from the competent authorities vdthin 6 months of being put in possession and you should go into regular commercial production duly erecting machinery and obtaining regular power supply connection within two years of being put in possession of the allotted plot/land. 17. b) Any extensions of time, if considered, will be subject to levying of penalty 10% on the land cost at the prevailing rates. No extension for more than 2 years can be entertained. 18. You should implement the project as envisaged and commence commercial production within two years of taking possession of the Plot. If no such steps are taken within 6 months, the allotment is liable for cancellation. 19. Registration of the sale deed will be made in your favour only after implementation of your unit In full In the allotted plot/shed. ” Pursuant to the order of allotment, an agreement for sale was 6. executed between the parties on 13.12.2007. Among others, Clauses 17, 18 and 19 were also incorporated in the agreement to sell. Failure on the part of the petitioner to implement the project and commence production resulted in the issuance of a notice to the petitioner by the API 1C, which was followed by a representation from the petitioner, dated 09.04.2011, seeking extension of time to implement the project. 7. Based on the representation so made by the petitioner, extension was granted up to November, 2012, for implementation of the project, subject to the following conditions; 4 HCJ & RCJ W.A.No.447 of 2025 a) on payment of condonation fee of Rs.51,80,000/- at the rate of 4% on the prevailing land cost within 15 days from the date of receipt of the said order; and b) an undertaking to be furnished duly notarized and authorizing the APIIC to resume the unutilized portion of land out of the allotted extent which found vacant at a later date. 8. It appears that against the condition regarding delay condonation fee, a representation was filed on 04.10.2011 by the petitioner for waiver of the said fee and for permission to implement the project without the penalty, which was rejected. Since the request of the petitioner for waiver of the delay condonation fee was rejected and since no such payment was deposited, the Zonal Manager, vide the order, dated 21.09.2012, communicated to the petitioner that allotment of land measuring Ac.80.00 Cents had been cancelled with immediate effect. The petitioner was also informed that the payment made by the company would be refunded separately after execution of the Cancellation Deed as per the rules of the Corporation. The petitioner yet again preferred a representation before the APIIC for restoration of the allotment of land and extension of time for implementation of the project which was considered by APIIC and orders passed on 09.11.2012, whereby the following was ordered: 9. “ you have requested the Corporation for restoration and extension of time for implementation of the project. The request made 5 HCJ & RCJ W,A.No.447 of 2025 by you for restoration is examined by the Corporation and it is decided to offer restoration of allotment of land measuring Ac.80.00 cts. and extension of time up to 31-12-2014 for implementation of the project in the subject land is issued subject to the following terms and conditions: 1. You should pay 7% delay condonation fee on the present land cost which works out to Rs. 1,01,53,114/- (Rupees One Crore One Lakh Fifty Three Thousand One Hundred and Fourteen Only) by way of Demand Draft drawn in favour of "APIIC Limited", payabe at Bobbin within 15 days from the date of receipt of this letter. 2. You should furnish Undertaking on Rs.lOO/- NJS duly notarized, mentioning that APIIC has right to the unutilized portion if found at a later date and you do not have any objection to do so. resume 3. You should furnish plant and machinery layout and the detailed future plan of action with specific dates and timelines. Therefore, it is requested to fulfill the above terms and conditions for restoration and extension of time. Please note that if any failure will resulting resumption of the land as indicated in the cancellation orders dated 21-09-2012. ” 10. On 09.10.2014, yet again, a show cause notice was served upon petitioner, highlighting the failure on the part of the petitioner to utilize the plot/land for purposes for which it was so allotted. The petitionerwas called upon to show cause as to why the allotment be not cancelled. Finally 21.03.2016, the allotment was cancelled and directions issued to hand the possession of the land to the Corporation. the , on over 6 HCJ & RCJ W A.No 447 of 2025 The petitioner yet again preferred an application before the API 1C seeking extension of time for a period of one year up to September, 2019. This request was considered by the Board of APIIC, whereby it was decided 11. to grant extension of time for a period up to September, 2019, with applicable penalties for condonation of delay with effect from 01.01.2015 towards restoration of allotment and penalty per the Allotment Regulations, 2012. The pay an amount of Rs.1,37,18,942/- along with applicable GST within 15 days from the date of receipt of the said letter, dated 03.10.2018. as petitioner was accordingly directed to 12. Vide communication, dated 24.10.2018 the petitioner sought waiver of penalty for delay condonation, primarily attributing the delay availability of basic infrastructure facilities at the site demand in the steel market, which to non- as also due to sluggish according to the petitioner, had affected the inflow of funds into the company coffers 13. By virtue of communication. dated 02.03.2019, on a representation filed by the petitioner seeking extension of time for waiver of penalty, the board took decided to extend time only for a period of up to 2022 and a decision not to waive the penalty but one year as a last chance with an applicable penalty of Rs.1,37,18,942/- along with GST. The said amount was directed to be deposited within 15 days from the said date 14. In that context, the writ petition was filed challenging the decision whereby the petitioner was directed to deposit Rs.1,37,18,942/- and also 7 HCJ & RCJ W,A No 447 of 2025 sought a direction to the respondents to permit extension of time to the petitioner company to implement the project without reference to the letter of cancellation, dated 21.03.2016. The case set up by the petitioner before the learned single Judge 15. was that delay in setting up the unit was attributable mainly to the failure on the part of the APIIC to provide the basic infrastructure facilities, including an electric connection, which was the most important element to run the steel manufacturing unit, as the same was power intensive and that failure to discharge its obligation would render the decision to cancel the allotment and impose the penalty of Rs.1,37,18,942/- invalid. 16. By virtue of the judgment and order impugned, the learned single Judge, while dismissing the petition, ordered the APIIC to refund the payment made by the petitioner, subject to execution of the cancellation of sale agreement and re-delivery of the possession. The learned single Judge held that the petitioner cannot be granted the relief, inasmuch as the cancellation of allotment proceedings, dated 21.03.2016, had become final, and that the subsequent proceedings regarding extension of time were only subject to fulfillment of certain conditions, which the petitioner had failed to comply with. and therefore, in those circumstances, revival of the contract in favour of the petitioner was impermissible in law. On the issue of imposition of penalty, the learned single Judge held that the penalty could be imposed according to Clause 8(c) of the agreement to sell. 8 HCJ & RCJ W.A.No 447 of 2025 17. Challenging the judgment and order impugned, learned counsel for the appellant herein reiterated the submissions which were otherwise noticed by the learned single Judge. It was also urged that the decision to impose penalties as a condition precedent for granting extension was barred in law inasmuch as the delay in execution of the project was attributable to the respondent - APIIC. 18. Learned counsel for the appellant also sought to propound the principles of proportionality as also referred to the judgment of the Apex Court rendered in the case of Central Inland Water Transport Corporation Limited and another Vs. Brojo Nath Ganguly and another^ to urge that the terms and conditions agreed upon by the appellant at the time of execution of the agreement to sell, which provided for the imposition of penalty at the rate of 10%, was on account of unequal bargaining power of the appellant, and therefore such a condition would not have been at all pressed by the respondent while considering the grant of extension in favour of the appellant. 19. Learned counsel for the respondent, on the other hand, would submit that there was no obligation on the part of APIIC to provide the electric connection supply to the appellant and that the minimum electric supply facility was available to the appellant at the site. It was also the stand of the APIIC in the reply affidavit that, in the project report which had been submitted before the APIIC, it was represented by the appellant that the company would generate its own power. (1986)3 see 156 9 HCJ & RCJ W A No.447 of 2025 20. With reference to the provisions of the allotment order and also the agreement to sell, it was sought to be emphasized that things clear to the appellant that if the petitioner needs the were made power supply, it had to approach A.P. Transco for requirements beyond 33/11 kV, which was already available with the APEPDCL, which supplies power to the area. 21. Heard learned counsel for the parties. 22. Admittedly, the project has not taken off on-spot, despite the fact that there were terms and conditions agreed to between the parties with regard to the commencement of the work on the site in question as also the production. Clauses 17 and 18 of the order of allotment reproduced in the preceding paragraphs also made it clear to the appellant that production after erecting machinery and obtaining regular power supply was to commercial commence within two years of the appeiiant being put in possession of the allotted land, extension as also envisaged to be accompanied by levy of penalty of 10% of the land cost at the prevailing rates. 23. It appears from the correspondence on record that the duty to obtain the electric connection of the capacity required by the appellant unit was to be made available by A.P. Transco as per the agreed terms and conditions. However, the correspondence on record suggests that the petitioner from time to time had been seeking extension on account of the sluggish market of the steel industry, the pandemic, of requisite funds to the coffers of the as also the lack of inflow company. 10 HCJ & RCJ W.A No.447 of 2025 24. The appellant, it appears, was hiding behind the veil of lack of infrastructural facilities, only with a view to somehow avoid surrendering the land in question, which is as big a chunk as Ac.SO.OOcts. It appears that the project did not take off on account of the financial rather than any other reason. If an electric connection for the setting up of the manufacturing unit, the petitioner as many as eight years before finally it claims that the year 2015. Even after 2015, setting up of the unit. incapacity of the petitioner. was so made available would not lay low for connection was provided in not much on the ground had happened for 25. Be that as it may, the APIIC would be well invoke the provisions of the order of allotment order cancellation of the allotment penalties at the agreed rates which rates. These were the agreed terms and consciously understood and acted in the instant case. within its rights to as also the agreement to sell to or extend time subject to realization of the was 10% of the land cost at the prevailing conditions which the appellant had upon. There is no element of arbitrariness 26. Insofar as the issue of proportionality is concerned, the decision appears to have been taken after granting a lot of indulgence to the appellant over and over again giving it opportunities to set up the unit by repeated extensions. The delay in setting up the steel manufacturing unit does affect the Andhra Pradesh Industrial Infrastructure State, which allotted the land at sub mi Corporation and ultimately the minimal rate of Rs.lOO/- per Sq.mtr. to the 11 HCJ & RCJ W A,No 447 of 2025 appellant with a view to ensuring the generation of steel production, which would be used for development of infrastructure in the country and also to generate employment opportunities for the unemployed. 27. Allowing the resource, such as land, to lie idle for a long period of time would not certainly augur well for the industrial development of the State, and therefore the decision to cancel the allotment cannot be said to be in any manner irrational or arbitrary much less can the same be said to be bad on the principle of proportionality. 28. Having considered the matter, we cannot persuade ourselves to take a view different from the one taken by the learned single Judge in dismissing the petition. The present appeal is found to be without any merit and is, accordingly, dismissed. No costs. Consequently, connected miscellaneous applications, if any, shall stand closed. Sd/- A/l RAMESH BABU DEPUT^f REGISJRAR OFFICER //TRUE COPY// To, SE 1. One CC to Sri P, Roy Reddy, Advocate 2. One CC to Sri Santhi Chandra, 3. Three C.D. Copies. [OPUC] SC for API IC Advocate [OPUC] Cnr j -4 HIGH COURT DATED:25/04/2025 ^ 0? jun w’’’ I* JUDGMENT WA.No.447 of 2025 DISMISSING THE WRIT APPEAL WITHOUT COSTS