The Supreme Court upheld the Kerala High Court’s decision regarding Poyilakada Fisheries’ non-utilization of industrial land, emphasizing that such properties must foster economic development and employment. The company was found inactive since 2004 and lost its land rights after failing to operate. The ruling promotes the reallocation of idle industrial land for productive use.
New Delhi: The Supreme Court recently reinforced the principle that industrially allotted land must be utilized for economic development and industrial growth, ensuring it serves its intended purpose of generating income and employment. This observation was made while dismissing a plea challenging a Kerala High Court decision in the case of Poyilakada Fisheries Pvt. Ltd. v. State of Kerala.
A Bench of Justices Surya Kant and N Kotiswar Singh upheld the Kerala High Court’s ruling that industrial land allotments should not remain idle or underutilized. The top court remarked,
“Let the land be used by someone who will generate some income and employment now. In our view, no case made to interfere with the Division Bench (High Court) order. If the petitioner is eligible for compensation as per single judge order, let it be decided by competent authority.”
The ruling emphasizes that industrial land allotments are a critical tool for fostering economic development and industrial progress.
The case involved a plea by Poyilakada Fisheries Pvt. Ltd., which had been allotted land in Kerala in 1990 for industrial purposes, specifically for the manufacture of frozen marine products. The patta, or legal document proving ownership of the property, included conditions that prohibited alienation or encumbrance without prior government approval.
However, the company ceased operations in 2004, citing economic hardships. Despite several notices from authorities and repeated assurances by the company to resume operations, the unit remained non-functional.
By 2014, after a decade of inactivity, the General Manager of the District Industries Centre re-allotted the land to four other entities. This decision was based on the company’s failure to use the land for its intended purpose.
Aggrieved by the re-allotment, Poyilakada Fisheries approached the Kerala High Court, challenging the government’s decision to cancel the patta. A single-judge Bench dismissed the writ petition, citing the company’s failure to utilize the land as required.
However, the court allowed the company to claim compensation or value for improvements in accordance with the relevant rules.
Later, a Division Bench of the Kerala High Court upheld the single-judge ruling, observing,
“(Industrial) plots are allotted at concessional rates with a view to provide opportunity to entrepreneurs to establish industrial units which will contribute to the industrial growth and economic development. When the allottee fails to utilize the property for the purpose for which it is allotted, the very object of the scheme gets defeated.”
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Unhappy with the Division Bench’s decision, Poyilakada Fisheries moved to the Supreme Court. However, the apex court dismissed the appeal, concurring with the High Court’s reasoning.
The Supreme Court’s decision ensures that idle industrial land is re-allocated to entities capable of using it productively for the greater benefit of economic growth and employment generation.
The case saw Advocates Rashmi Nandakumar and Yashmita Pandey representing Poyilakada Fisheries, while Advocates K Rajeev, Niveditha R Menon, Aditya Verma, and Tarun Kumar represented the respondents.
Case Title – Poyilakada Fisheries Pvt. Ltd. v. State of Kerala
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