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As per case facts, petitioners challenged the cancellation of seven lease deeds for industrial land. The land was originally allotted for industrial purposes under a rehabilitation scheme for a sick
...company, with obligations to revive industrial units and re-employ workers. Petitioners claimed their efforts were genuine, including substantial payments to workers, and that the cancellation was arbitrary, without due process, and violated natural justice. They argued that the District Collector lacked competence and that their legitimate expectations were violated. The State contended that petitioners failed to fulfill the core objective of industrial revival and re-employment, misrepresented facts, and sought to divert the land for impermissible uses, thereby breaching public trust. The question arose whether the cancellation proceedings were legally valid, considering the terms of the lease deeds, the rehabilitation scheme, principles of natural justice, the competence of the authority, and the petitioners' adherence to the original purpose of the land grant. Finally, the court upheld the cancellation of the lease deeds. It found that the land was a government grant for a specific industrial purpose, and its conditions, including revival and re-employment, were fundamental. The court concluded that petitioners failed to establish any jurisdictional infirmity, demonstrable prejudice, or violation of natural justice, as they were given an opportunity to respond. The court stressed that the State, as custodian of public property, acted within its rights to prevent diversion of land from its intended public and economic purpose. It further directed the State to undertake a time-bound exercise to examine the feasibility of industrial revival and formulate a plan for productive utilization, considering both public interest and the legitimate interests of former workmen.
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