-Report by Utkarsh Kamal
In this case, according to the Supreme Court, the State Government cannot argue that Rules of Business were not followed throughout its decision-making process when the Cabinet establishes a committee and the latter’s acts are approved by the Minister and the rest of the Council. The Rajasthan Industrial Development and Investment Corporation Ltd. v. M/s Arfat Petrochemicals Pvt. Ltd. & Ors. case was decided by a bench consisting of Justice Surya Kant and Justice Vikram Nath, and they upheld the subcommittee’s decisions by ruling that the rules of business were followed because the subcommittee was only carrying out its duties on behalf of the entire Council of Ministers.
To J.K. Synthetics Ltd. (“JKSL”) in the Large-Scale Industrial Area of Kota (“LIA, Kota”), the State of Rajasthan granted a leasehold allocation of land (“Land”). The allocation was decided in accordance with the Rajasthan Land Revenue Act of 1956 and the State Government’s industrial policy. The Rajasthan State Industrial and Mineral Development Corporation Ltd. (“RSIMDC”) were established to carry out development projects throughout the State while the lease was still in effect. Following its division into two parts, Rajasthan State Industrial Development and Investment Corporation Ltd. (“RIICO”) took over as the immediate successor to RSIMDC. The RIICO Disposal of Land Rules, 1979 (“1979 Rules”) were established to manage RIICO’s operations with regard to areas under its ownership. In 1998, JKSL was deemed to be a sick firm, and on the directives of the Appellate Authority for Industrial and Financial Reconstruction (“AAIFR”), M/s. Arfat Petrochemicals Pvt. Ltd. (“Respondent No.1”) took over JKSL’s operations. A change was made to the lease of land originally granted to JKSL in favour of Respondent No. 1. After a while, Respondent No. 1 was unable to resuscitate JKSL’s industrial divisions. Respondent No. 1 then presented a plan to RIICO for changing the leased land’s use from industrial to commercial and for subdividing the land. In 2018, RIICO authorized the subdivision and conversion of land; nevertheless, the Model Code of Conduct went into effect the very following day in anticipation of the forthcoming Rajasthan State Assembly Elections. Following the 2018 elections in Rajasthan, which resulted in a new administration, the conversion of leased land came under examination. On January 1, 2019, the newly elected Council of Ministers established a Cabinet Committee to examine actions performed by the former ruling administration during the six-month period prior to the elections. The approvals granted to Respondent No. 1 were revoked by order of the State Government to RIICO. Which were newly won the state assembly election so respondent no.1 file the case in the High Court under article 226 of the constitution. The Cabinet Committee’s decision and RIICO’s actions to revoke the allocation to Respondent No. 1 were both overturned by the High Court. Following that, RIICO and the State Government chose to appeal to the Supreme Court.
LAW RELATED TO THE CASE:
Article 138. Enlargement of the jurisdiction of the Supreme Court
(1) The Supreme Court shall have such further jurisdiction and powers with respect to any of the matters in the Union List as Parliament may by law confer
(2) The Supreme Court shall have such further jurisdiction, and powers with respect to any matter as the Government of India and the Government of any State may by special agreement confer if Parliament by law provides for the exercise of such jurisdiction and powers by the Supreme Court
Article 226. Power of High Courts to issue certain writs
(1) Notwithstanding anything in Article 32 every High Court shall have powers, throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders, or writs, including writs in the nature of habeas corpus, mandamus, prohibitions, quo warranto, and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose
1) Whether the action taken by the Riico without the cabinet interference is valid or not
2) Whether the Riico has the power to allot the land to the petitioner or not
The first Respondent contested the appeal on the grounds that the government judgment is illegal if it does not follow the Rules of Business established under Article 166(3) of the Indian Constitution. The Industries Department is responsible for handling RIICO-related issues, and the Minister for Industries would serve as the nodal authority for making final decisions in this regard. The decision to revoke the lease and subdivide the land is invalid because the Minister for Industries was not involved in the Cabinet Committee or when the final decision was made. Riico is not allowed to allot the land to anyone, so the land allotted to the petitioner is invalid
The lease deed was renewed by the District Collector and not by the RIICO since the State Government, which is a party to the petitioner’s proceedings, was involved. According to the notification dated 18.09.1979, the State Government transferred the industrial areas developed and maintained by the Department of Industries to RIICO. As a result, the largest industrial area in Kota, where the subject land is located, was also transferred to RIICO by the State Government via a notification dated 28.09.1979. Therefore, as it is also authorized for the lands that have already been allocated, the RIICO is qualified to provide permissions or approvals under Rule 12 of the Rules of 1959. In order to build affordable housing under the CMJAY program, the petitioner company requested permission from the District Collector. Under this particular program, the District Collector had the right to provide permission regardless of whether the land was owned by the State Government or the RIICO. The fact that the District Collector personally sought the RIICO’s advice in this matter is clear evidence that the RIICO controlled the aforementioned land.
One cannot claim that the State Government violated the Rules of Business when the Cabinet Sub-Committee is only acting on behalf of the entire Council of Ministers. The Bench noted that the Committees had been established by the Council of Ministers to investigate various anomalies. The investigation of the actions taken by RIICO and its alleged abuse of inexistent powers in favour of Respondent No. 1 was also given to a specific committee. It was stated that governance needed to be done in a practical and effective way. The Rules of Business also advocates for collective governance by the Council of Ministers in terms of recommendations made to the Governor. As a result, the Bench determined that the Council had a collective say in the decision to form subcommittees to review decisions made by the previous administration, including those involving activities by RIICO. The Bench determined that the subcommittee was acting on behalf of the full Council of Ministers when it advised Respondent No. 1 to revoke the licenses and approvals. As a result, the Rajasthan Rules of Business were not broken. The decision of the High Court has been overturned
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