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K. Raheja Corporation Private Limited and Ramesh Valecha v. State of Goa And Ors
NLS/ENVIS/[October/2010]/Environment/ High Court Of Bombay At Goa
K. Raheja Corporation Private Limited and Ramesh Valecha v. State of Goa And Ors
(Hon’ble Judges: A.S. Oka, J and F.M. Reis, J.)
NLS/ENVIS/[October/2010]/Environment/ High Court Of Bombay At Goa
Several writ petitions were filed regarding the issue of setting up of Special Economic Zones in the State of Goa. State government of Goa decided to set up the Special Economic Zones (“SEZs”) in the State of Goa and allotted land for the same through Goa Industrial Development Corporation with the approval of central government under the Special Economic Zones Act,2005 and SEZ’s were notified.
The state government of Goa later decided to cancel the policy of setting up of SEZs in the State of Goa and cancelled the recommendations made under the Special Economic Zones Act, 2005. Show cause notices were issued by the Goa Industrial Development Corporation calling upon the companies to show cause as to why the leases should not be revoked. The write petitions include the ones filed by the companies/developers and also the public interest petitions challenging the allotment of the lands to the companies for setting up of the SEZs.
After hearing all the parties, the Court upon the issue of whether the approval for SEZ could be withdrawn held that according the Special Economic Zones Act, 2005, Central Government has a power to withdraw the approval on the basis of withdrawal of the recommendations by the State Government. However, the approval can be cancelled or withdrawn in such a case only after following the principles of natural justice. The fact that several steps have been taken by the developer on the basis of approval will certainly be a relevant consideration which will have to be taken into account.
While deciding the issue regarding the legality of the decision of the State Government of withdrawing the SEZ Policy the Court the limitations of power of the court exercising writ jurisdiction while dealing with the policy matters are well settled and unless the policy or action is inconsistent with the Constitution and the laws or arbitrary or irrational or abuse of power, the court will not interfere with such matters.The Court held that it is for the state to decide whether a recommendation can be made or consent can be given for setting up SEZ in the state and therefore, the state has power to formulate policy in that behalf. There are no malafides alleged or shown.
Further the Court regarding the issues of the legality of allotments made by the Goa Industrial Development Corporation to various Companies for setting up of a SEZ and doctrine of promissory estoppels held that even though the settled position of law is clear that state-owned company or public-owned property cannot be dealt at the absolute discretion of the executive and certain precepts and principles have to be observed with public interest as the paramount consideration, the Comptroller and Auditor General of India (CAG) report which points out that serious irregularities and illegalities in the allotment of lands is recommendatory in nature and the same is not placed before the legislature pursuant to the Article 151 of Constitution of India. Regarding promissory estoppels the Court held that the decision of the Government of Goa of the withdrawal of its Special Economic Zones policy is legal and valid. The said decision is guided by considerations of larger public interest. The state government found that setting up of Special Economic Zones will not be in larger public interest and hence it will be inequitable to hold the state government to be bound by its alleged promise and representation