# Smt Savita Sharma v. State of U.P. & Ors

- **Citation:** (2025) 7 ILRA 577
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-07-11
- **Case number:** Writ C No. 21802 of 2025
- **Bench:** Mahesh Chandra Tripathi, Vinod Diwakar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/smt-savita-sharma-v-state-of-u-p-ors-53600
- **Pages:** 9

## Headnote

Anuj Pratap Singh, C.S.C.

Issue for Consideration
Matter pertains to cancellation of industrial plot
allotment by Uttar Pradesh State Industrial
Development Authority (UPSIDA) and rejection
of petitioner's restoration application on grounds
of limitation and non-compliance with lease
conditions. Issue for consideration was whether
the petitioner, having defaulted in payment and
failed to establish industrial activity within the
stipulated time, is entitled to restoration of lease
and quashing of e-auction proceedings.

Headnotes
Uttar
Pradesh
State
Industrial
Development
Authority
(UPSIDA)
-
Allotment of Industrial Plot - Cancellation
of
allotment
-
Repeated
Defaults
-
Financial Hardship - Restoration of Lease
- Equity - Delay and Non-Performance -
Public
Interest
-
Industrial
Policy
Considerations
-
Equitable
indulgence
cannot be granted to a party in prolonged
breach
of
contractual
and
statutory
obligations - Restoration after repeated
defaults
undermines
fiscal
discipline,
transparency,
and
industrial
growth
objectives - Principles of Natural Justice -
Public Trust Doctrine - Industrial Policy -
UPSIDA's action are neither arbitrary nor
violative
of
natural
justice;
writ
jurisdiction cannot be invoked to condone
persistent default.
Held: Court is not persuaded to accept the
petitioner's explanation of financial hardship and
medical exigencies as a valid justification for
years of non-compliance with the essential
terms of the allotment and lease - A mere
expression of willingness to pay outstanding
dues after the initiation of e-auction proceedings
or subsequent to the cancellation of the
allotment cannot obliterate a prolonged and
willful
failure
to
adhere
to
contractual
obligations - Even if the restoration application
was within one month from the date of service,
it cannot absolve substantive and prolonged
breaches - Restoring a lease after repeated
defaults strikes at the very foundation of fiscal
discipline, public interest, and industrial policy
objectives - UPSIDA acted lawfully and in public
interest - Cancellation of allotment and rejection
of restoration are justified - No interference
under Article 226 of the Constitution of India -
Petition dismissed - No order as to costs. (paras
11 to 22) (E-7)

Case Law Cited
Skyline Contractors Pvt. Ltd. v. State of U.P.,
(2008) 8 SCC 265; Kamla Nehru Memorial
Trust and Others v. U.P. State Industrial
Development Corporation Limited and Others,
SLP(C) Nos. 31887-88/2017; M.C. Mehta v.
Kamal Nath, (1997) 1 SCC 388; Centre for
Public Interest Litigation v. Union of India,
(2012) 3 SCC 1

List of Acts
Constitution of India; U.P. Urban Planning and
Development Act, 1973

List of Keywords
Allotment - Lease Cancellation - Restoration
Application - Financial Hardship - Industrial
Area - UPSIDA - Default - Public Interest -
578 INDIAN LAW REPORTS ALLAHABAD SERIES
Fiscal Discipline - Natural Justice - E-auction -
Industrial Development - Non-compliance -
Judicial Interference - Transparency - Industrial
Policy

Case Arising From
Order dated 24.05.2024 cancelling lease of Plot
No.
E-236,
Industrial
Area,
Karkhiyaon,
Phoolpur, Varanasi, and order dated 12.08.2024
rejecting
restoration
application;
challenge
under
Article
226
seeking
quashing
of
cancellation, restoration of allotment, and
cancellation
of
e-auction
notice
dated
23.06.2025.

Appearances for Parties
For the Petitioner:
Shri Om Prakash Shukla, Advocate.
For the Respondents:
Shri Anuj Pratap Singh, C.S.C.
Shri Devesh Vikram, Addl. C.S.C. (for State
Respondent).
Shri Ambrish Shukla, Counsel for U.P. State
Industrial Development Authority (UPSIDA)

## Text

7 All. Smt. Savita Sharma Vs. State of U.P. & Ors.
577
dated 17.05.2025 expunging the name of
Sahadat Hussain from Jamman-8 as hereditary
tenant.

30. Writ petition fails and is hereby
dismissed.

31. However, no order as to costs.
----------
(2025) 7 ILRA 577
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 11.07.2025
BEFORE

THE HON'BLE MAHESH CHANDRA
TRIPATHI, J.
THE HON'BLE VINOD DIWAKAR, J.

Writ C No. 21802 of 2025

Smt Savita Sharma ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Om Prakash Shukla

Counsel for the Respondents:
Anuj Pratap Singh, C.S.C.

Issue for Consideration
Matter pertains to cancellation of industrial plot
allotment by Uttar Pradesh State Industrial
Development Authority (UPSIDA) and rejection
of petitioner's restoration application on grounds
of limitation and non-compliance with lease
conditions. Issue for consideration was whether
the petitioner, having defaulted in payment and
failed to establish industrial activity within the
stipulated time, is entitled to restoration of lease
and quashing of e-auction proceedings.

Headnotes
Uttar
Pradesh
State
Industrial
Development
Authority
(UPSIDA)
-
Allotment of Industrial Plot - Cancellation
of
allotment
-
Repeated
Defaults
-
Financial Hardship - Restoration of Lease
- Equity - Delay and Non-Performance -
Public
Interest
-
Industrial
Policy
Considerations
-
Equitable
indulgence
cannot be granted to a party in prolonged
breach
of
contractual
and
statutory
obligations - Restoration after repeated
defaults
undermines
fiscal
discipline,
transparency,
and
industrial
growth
objectives - Principles of Natural Justice -
Public Trust Doctrine - Industrial Policy -
UPSIDA's action are neither arbitrary nor
violative
of
natural
justice;
writ
jurisdiction cannot be invoked to condone
persistent default.
Held: Court is not persuaded to accept the
petitioner's explanation of financial hardship and
medical exigencies as a valid justification for
years of non-compliance with the essential
terms of the allotment and lease - A mere
expression of willingness to pay outstanding
dues after the initiation of e-auction proceedings
or subsequent to the cancellation of the
allotment cannot obliterate a prolonged and
willful
failure
to
adhere
to
contractual
obligations - Even if the restoration application
was within one month from the date of service,
it cannot absolve substantive and prolonged
breaches - Restoring a lease after repeated
defaults strikes at the very foundation of fiscal
discipline, public interest, and industrial policy
objectives - UPSIDA acted lawfully and in public
interest - Cancellation of allotment and rejection
of restoration are justified - No interference
under Article 226 of the Constitution of India -
Petition dismissed - No order as to costs. (paras
11 to 22) (E-7)

Case Law Cited
Skyline Contractors Pvt. Ltd. v. State of U.P.,
(2008) 8 SCC 265; Kamla Nehru Memorial
Trust and Others v. U.P. State Industrial
Development Corporation Limited and Others,
SLP(C) Nos. 31887-88/2017; M.C. Mehta v.
Kamal Nath, (1997) 1 SCC 388; Centre for
Public Interest Litigation v. Union of India,
(2012) 3 SCC 1

List of Acts
Constitution of India; U.P. Urban Planning and
Development Act, 1973

List of Keywords
Allotment - Lease Cancellation - Restoration
Application - Financial Hardship - Industrial
Area - UPSIDA - Default - Public Interest -
578 INDIAN LAW REPORTS ALLAHABAD SERIES
Fiscal Discipline - Natural Justice - E-auction -
Industrial Development - Non-compliance -
Judicial Interference - Transparency - Industrial
Policy

Case Arising From
Order dated 24.05.2024 cancelling lease of Plot
No.
E-236,
Industrial
Area,
Karkhiyaon,
Phoolpur, Varanasi, and order dated 12.08.2024
rejecting
restoration
application;
challenge
under
Article
226
seeking
quashing
of
cancellation, restoration of allotment, and
cancellation
of
e-auction
notice
dated
23.06.2025.

Appearances for Parties
For the Petitioner:
Shri Om Prakash Shukla, Advocate.
For the Respondents:
Shri Anuj Pratap Singh, C.S.C.
Shri Devesh Vikram, Addl. C.S.C. (for State
Respondent).
Shri Ambrish Shukla, Counsel for U.P. State
Industrial Development Authority (UPSIDA)

(Delivered by Hon'ble Mahesh Chandra
Tripathi, J.)
&
(Hon'ble Vinod Diwakar, J.)

1. Heard learned counsel for the
petitioner, Shri Devesh Vikram, learned
Additional Chief Standing Counsel for
State respondent and Shri Ambrish Shukla,
learned counsel for U.P. State Industrial
Development Authority1.

2. The present writ petition has been
filed, inter alia, seeking issuance of a writ
in the nature of certiorari to quash the
impugned order dated 24.05.2024, whereby
the petitioner's lease has been cancelled,
and to set aside the subsequent order dated
12.08.2024, by which the petitioner's
review
application
dated
03.07.2024,
seeking restoration of the allotment, has
been rejected. The petitioner further seeks
to cancel the scheduled e-auction of the
plot in question and prays for a direction to
the respondent authorities restraining them
from dispossessing the petitioner from Plot
No. E-236, ad-measuring 767.32 square
meters,
situated
at
Industrial
Area
Karkhiyaon, Phoolpur, Varanasi.

3. The petitioner was duly allotted the
plot in question for the purpose of
establishing
industrial
activities,
in
accordance
with
the
policies
and
procedures prescribed by the concerned
authorities. Respondent No. 2 - Uttar
Pradesh
State
Industrial
Development
Authority (UPSIDA) - is a state-level
industrial development authority entrusted
with the responsibility of promoting and
facilitating the development of industries
across the State of Uttar Pradesh. As the
governing body, UPSIDA exercises control
over the allotment, management, and
regulation of industrial plots within its
notified areas, including the plot allotted to
the petitioner.

4. The
records
reveal
that
the
petitioner was allotted Plot No. E-236,
admeasuring 767.32 square meters, situated
in
the
Industrial
Area,
Karkhiyaon,
Phoolpur, Varanasi, by UPSIDA through
an allotment letter dated 18.11.2019, for the
purpose of establishing a fruit ripening
industrial unit. Pursuant to the allotment,
the petitioner deposited the earnest money,
completed all requisite formalities, and
executed
a
90-year
lease
deed
on
25.09.2020. Despite taking possession of
the plot, the petitioner failed to deposit the
balance
premium
amount
of
Rs.19,82,912.03/-. She sought multiple
extensions, citing financial constraints and
health-related issues within her family, and
even approached this Hon'ble Court by
filing Writ Petition No. 40081 of 2023. The
7 All. Smt. Savita Sharma Vs. State of U.P. & Ors.
579
said writ petition was disposed of on
12.12.2023, granting her liberty to clear the
dues within a period of three months.

4.1 However, upon her failure to
comply with the said order, the respondent
authority cancelled the allotment vide order
dated
24.05.2024.
Subsequently,
the
petitioner
filed
an
application
dated
03.07.2024 seeking restoration of the plot,
which was rejected by the respondent
authority on 12.08.2024 on the ground of
limitation. The petitioner contends that the
cancellation order was served upon her
only on 05.06.2024, and therefore, her
restoration application was within the
prescribed time limit. Despite her repeated
requests for restoration and her readiness to
pay the outstanding dues along with
interest, the respondent authority proceeded
to list the plot for e-auction on 11.07.2025
pursuant to the e-auction notice dated
23.06.2025.

4.2 Aggrieved by the said actions,
the petitioner has invoked the extraordinary
jurisdiction of this Hon'ble Court under
Article 226 of the Constitution of India,
praying for quashing of the impugned
orders dated 24.05.2024, 12.08.2024, and
the e-auction notice dated 23.06.2025.

5. Learned counsel for the petitioner
contends that the petitioner, despite facing
severe financial hardships and family
health emergencies, has never acted with
any mala fide intent. She continues to
remain in possession of the disputed plot,
has developed partial infrastructure for
industrial purposes, and is ready and
willing to clear the outstanding dues along
with applicable interest and penalties. It is
submitted that the impugned orders are
vitiated by procedural irregularities, as the
petitioner's application for restoration of
the plot dated 03.07.2024 was filed within
one month from the date of actual service
of the cancellation order, which was
received on 05.06.2024.

5.1 It is further argued that
UPSIDA failed to consider the petitioner's
bona fide conduct and her genuine attempts
to comply with the conditions of allotment.
Arbitrary cancellation of the plot would
defeat the larger object of industrial
development for which the allotment was
initially made. The learned counsel also
submits that the principles of natural justice
were not adhered to, and the rejection of
the restoration application was mechanical
and devoid of proper consideration. Lastly,
it is urged that denial of restoration and the
initiation of re-allotment through e-auction
is unjust, inequitable, and warrants judicial
interference, with a prayer for restoration of
the allotment in favour of the petitioner.

6. Per contra, Shri Ambrish Shukla,
learned counsel appearing for UPSIDA, has
vehemently opposed the writ petition. He
submits that the petitioner was granted a
conditional allotment dated 18.11.2019,
under which she was required to fulfill all
mandatory
formalities,
including
completion
of
construction,
obtaining
requisite approvals, and commencement of
production, within a stipulated period of
two years. Despite repeated reminders and
notices dated 07.12.2020, 02.06.2021,
07.12.2021, 14.03.2023, and others, the
petitioner neither cleared the outstanding
dues amounting to Rs.19,82,912.03/- nor
established a functional industrial unit on
the allotted plot. Even the extended
timeline granted up to 18.05.2023 expired
without compliance.

6.1 It is further contended that
although the earlier writ petition was
580 INDIAN LAW REPORTS ALLAHABAD SERIES
disposed of on 12.12.2023 with a direction
to clear all dues within three months, the
petitioner failed to adhere to this deadline.
Shri Shukla asserts that the restoration
application dated 03.07.2024 was not filed
within one month from the date of
cancellation order (i.e., 24.05.2024) as
required, and UPSIDA is not bound by the
petitioner's claim regarding the alleged
date of service of the cancellation order. In
support of his arguments, he has placed
reliance on Condition Nos. 09, 11, 15, 20,
and 23 of the allotment letter, which are
reproduced herein below:

"9. You shall have to get the
maps approved within 90 days of taking
possession. The formalities to be done in
this regard are available on website
onlineupside.com.

11. You shall have to start
production on the plot within 12.00 months
from date of allotment and intimate the
corporation of the same.

15.
The
allotment
will
be
cancelled if and when any one of the
following mentioned violations happen and
further action after cancellation shall be
taken up as mentioned in clause 16 below.
a. If you fail to comply to any of the
conditions 7-12 above within the time
stipulated
above,
the
time
duration
mentioned being of essence. OR b. If you
fail to make payment of Interest anil or
premium on or before the due date(s) as
mentioned in clause 5 of this letter OR c. If
you fail to comply clause 23, 24 and 26
mentioned here in below.

20. You will pay use and
occupation charges/lease rent at the rate of
Rs. 1/- per Sq.mtr per year during the first
thirty years, Rs. 2.5/- per Sq.mtr per year
during the next thirty years after expiry of
the first thirty years and Rs. 5/- per Sq.mtr
per year during the next thirty years after
expiry of the first sixty years. Use and
occupation charges are payable till the
date lease is granted to you whereafter
lease rent will have to be paid.

23. You will utilize minimum 40%
area of the plot by covering it by roof/
permanent shed within the above specified
period failing which the allotment of the
plots(s) will be cancelled."

7. Relying on the strict enforcement of
the terms of the lease, learned counsel for
UPSIDA asserts that the cancellation of the
petitioner's allotment is legal, justified, and
strictly in accordance with the conditions
stipulated in the allotment letter. It is
submitted that UPSIDA, being a statutory
authority, has an obligation to ensure the
optimal utilization of industrial plots, and
the prolonged non-compliance by an
allottee, despite repeated indulgence and
extensions,
inevitably
warrants
cancellation. It is further contended that the
fresh e-auction process initiated by the
authority is a transparent and lawful
mechanism to re-allocate unused industrial
land to deserving applicants, thereby
promoting industrial growth and public
interest. Lastly, it is urged that since the
petitioner has failed to fulfill the essential
terms and conditions of the allotment
agreement
as
well
as
the
general
conditions, the impugned orders have been
rightly passed, and the present writ petition
is devoid of merit and liable to be
dismissed.

8. The primary objectives of UPSIDA
are to promote and attract investments
within the State of Uttar Pradesh by
facilitating
industrial
growth
and
7 All. Smt. Savita Sharma Vs. State of U.P. & Ors.
581
development. The authority is entrusted
with the responsibility of developing and
maintaining
requisite
infrastructure,
providing
incentives,
and
creating
a
conducive environment for businesses to
establish and expand their operations in the
state. In furtherance of these objectives,
UPSIDA also endeavours to generate
employment opportunities and to support
and strengthen the growth of existing
industries across Uttar Pradesh.

9. The decision of the Hon'ble Apex
Court in Skyline Contractors Pvt. Ltd. v.
State of U.P 2. squarely applies to the facts
of the present case. In that matter, despite
partial and delayed payments by the
allottee, the Hon'ble Supreme Court upheld
the cancellation of allotment by NOIDA,
holding that unilateral deposits made
without prior approval or consent could not
bind the authority. Similarly, in the present
case, the petitioner neither sought nor
obtained any formal extension of time from
UPSIDA within the contractual framework.
Her delayed restoration applicationsthough sought to be justified by referring to
the alleged date of service-cannot cure or
condone years of non-performance and
breach of essential terms of allotment.

10. In a recent judgment, the Hon'ble
Apex Court in Kamla Nehru Memorial
Trust and Others v. U.P. State Industrial
Development Corporation Limited and
Others 3 held that, in order to preserve the
integrity of the allotment process, allowing
deliberate and repeated defaults by an
allottee
to
persist
unchecked
would
undermine the entire framework of land
allocation and set a harmful precedent
detrimental to public interest. The relevant
portion of the judgment is reproduced
herein below:-

"25. We may hasten to add at this
stage that the dues for the Subject Land,
allotted in 2003, remained unpaid despite
multiple communications spanning several
years. KNMT not only failed to make timely
payments but also sought unwarranted
concessions, including waiver of interest
and rescheduling of dues. This persistent
non-compliance establishes KNMT as a
chronic defaulter, while the continued
attempts to seek waiver evince a deliberate
strategy to avoid payment obligations.
UPSIDC's action in treating KNMT as a
defaulter was, therefore, both justified and
necessary to preserve the integrity of the
allotment process. Allowing such deliberate
defaults
to
persist
unchecked
would
undermine the entire framework of land
allocation and set a detrimental precedent.

1. 26. For the reasons stated, we
are satisfied that the cancellation of
allotment by UPSIDC is fully justified and
in accordance with law.

E. INVOKING THE PUBLIC
TRUST
DOCTRINE
IN
THE
ALLOCATION OF RESOURCES.

2. 27. The prolonged litigation
initiated by KNMT has spanned over fifteen
years, unnecessarily burdening the judicial
system
and
impeding
the
efficient
functioning of public authorities. Such
protracted disputes highlight the need for
more stringent initial evaluation processes
to prevent chronic defaults.

3. 28. While we have upheld the
cancellation due to KNMT's default, the
circumstances reveal systemic concerns in
the original allocation process. UPSIDC
allotted the Subject Land to KNMT within
merely two months of application, raising
questions about the thoroughness of the
582 INDIAN LAW REPORTS ALLAHABAD SERIES
evaluation.
Furthermore,
during
the
pendency of

4.
this
dispute,
UPSIDC
demonstrated
remarkable
alacrity
in
considering alternative allotments to M/s.
Jagdishpur Paper Mills Ltd.

5. 29. We, therefore, consider it
necessary to examine whether UPSIDC's
procedure for industrial land allotment
meets
standards
of
administrative
propriety, particularly in light of the Public
Trust Doctrine (Doctrine) mandating that
public resources be managed with due
diligence, fairness, and in conformity with
public interest.

6. 30. The Doctrine emanates
from the ancient principle that certain
resources (seashores, rivers and forests)
are so intrinsically important to the public
that
they
cannot
be
subjected
to
unrestricted private control. Rooted in
Roman law and incorporated into English
common law, this Doctrine recognizes that
the Sovereign holds specific resources as a
trustee for present and future generations.
M.C. Mehta v. Kamal Nath, (1997) 1 SCC
388, para 24-25.

7. 31. In the Indian context, the
Doctrine has evolved to encompass public
resources meant for collective benefit,
reflecting the constitutional mandate Under
Article 21. As held in Natural Resources
Allocation In re, while the Doctrine does
not impose an absolute prohibition on
transferring
public
trust
property,
it
subjects
such alienation to stringent
judicial review to ensure legitimate public
purpose and adequate safeguards. Centre
for Public Interest Litigation V. Union of
India (2012) 3 SCC 1

8. 32. When a substantial tract of
industrial land is allocated without a
comprehensive evaluation, it raises critical
questions
about
adherence
to
these
principles. The Doctrine requires that
allocation decisions be preceded by a
thorough assessment of public benefits,
beneficiary credentials, and safeguards
ensuring continued compliance with stated
purposes.

9. 33. The allocation of 125 acres
of industrial land to KNMT without a
competitive process fundamentally violated
the Doctrine, which demands proper
procedure and substantive accountability
in public resource allocation. UPSIDC
ought
to
have
considered
verifiable
evidence of economic benefits, employment
generation
potential,
environmental
sustainability, and alignment with regional
development objectives to demonstrate that
the decision serves the collective benefit.
The
failure
to
adopt
transparent
mechanisms not only deprived the public
exchequer
of
potential
revenue-as
evidenced by the substantial appreciation
in the value of such a large tract of landbut also created a system where privileged
access supersedes equal opportunity. This
betrays the fiduciary relationship between
the State and its citizens.

34.
Having
upheld
the
cancellation due to KNMT's chronic
default, we observe that the hasty allotment
followed by years of litigation exemplifies
systemic deficiencies in the allocation
process. This necessitates comprehensive
directions to ensure that future allocations
uphold principles of transparency and
accountability,
thereby
preventing
prolonged disputes while ensuring that
public
resources
genuinely
promote
7 All. Smt. Savita Sharma Vs. State of U.P. & Ors.
583
industrial
development
and
economic
growth.

F.
CONCLUSION
AND
DIRECTIONS

10. 35. In light of our detailed
examination of the contentions raised by
the parties, the comprehensive analysis of
the factual and legal matrix and the
resultant conclusions, we uphold the
cancellation of the allotment by UPSIDC."

11. It is an admitted position that the
allotment of the plot in question was made
in favour of the petitioner on 18.11.2019,
subject to specific terms and conditions
requiring
the
establishment
and
operationalization of an industrial unit
within the period stipulated in the lease
deed.
The
lease
deed,
executed
on
25.09.2020,
further
reaffirmed
these
obligations. The petitioner was under a
contractual as well as statutory obligation
to clear all outstanding dues, obtain
necessary
approvals,
undertake
construction, and commence industrial
operations within the prescribed timeline.
However, despite repeated reminders and
notices issued by UPSIDA on various
occasions,
including
notices
dated
07.12.2020,
02.06.2021,
07.12.2021,
14.03.2023, and others, the petitioner failed
to ensure effective compliance. Even after
this Court, in Writ Petition No. 40081 of
2023, extended indulgence by its order
dated 12.12.2023 granting three months'
time to fulfil the lease conditions, the
petitioner once again defaulted in meeting
the requirements.

12. This Court is not persuaded to
accept the petitioner's explanation of
financial hardship and medical exigencies
as a valid justification for years of noncompliance with the essential terms of the
allotment and lease. While the Court is
mindful
of
and
sympathetic
to
the
petitioner's personal circumstances, a mere
expression
of
willingness
to
pay
outstanding dues after the initiation of eauction proceedings or subsequent to the
cancellation
of
the
allotment
cannot
obliterate a prolonged and wilful failure to
adhere to contractual obligations. Equity,
though an integral facet of the writ
jurisdiction, cannot be invoked in favour of
a party who has consistently failed to
perform its obligations under the allotment
and lease conditions.

13. The petitioner's contention that the
restoration application was filed within one
month from the date of actual service of the
cancellation order, even if assumed to be
correct,
cannot
absolve
her
of
the
substantive and prolonged breaches that
persisted for nearly four years. The
cancellation of the allotment was not
predicated merely upon any delay in filing
the
restoration
application
but
was
fundamentally based on the petitioner's
sustained failure to adhere to the core
obligations under the lease. This is not a
case where a minor procedural lapse alone
resulted in the cancellation; rather, it is one
of repeated and substantial non-compliance
with essential conditions.

14.
There
are
far
reaching
consequences of restoring a lease after
repeated
defaults.
The
fiscal
and
administrative
policies
of
the
State,
particularly in matters concerning the
allotment of industrial plots and lease
deeds, are anchored in principles of public
accountability,
efficient
utilization
of
resources, and the promotion of industrial
growth. When an allottee repeatedly
defaults-especially
over
a
prolonged
584 INDIAN LAW REPORTS ALLAHABAD SERIES
period involving multiple violations of
lease terms and statutory provisionsrestoring such a lease poses significant
fiscal, administrative, and public policy
challenges.

15. The Uttar Pradesh State Industrial
Development
Authority
(UPSIDA)
operates under a financial model designed
to recover the cost of infrastructure, fund
new development projects, and ensure
equitable distribution of industrial plots.
Allowing restoration of a lease despite
persistent non-payment undermines fiscal
discipline and sets a precedent for leniency
towards defaulters. This could result in
revenue losses, delayed development of
industrial infrastructure, financial strain on
the authority, and end up in erosion of
fiscal discipline.

16. The core objective of entities like
UPSIDA
is
to
promote
rapid
industrialization and economic growth.
Land lying idle due to an allottee's
prolonged default contradicts this aim. By
restoring such leases, the State risks stalling
new investments, delaying job creation, and
defeating the larger purpose of its industrial
policies and this would undermines public
and transparency.

17. Successive failures to comply with
lease terms also undermine public interest.
Permitting continued retention of land by a
non-performing allottee deprives deserving
applicants of opportunities and slows down
industrialization efforts. If such conduct is
tolerated through writ jurisdiction, it may
erode public confidence in the fairness and
transparency of the State's land allocation
framework.

18. Restoration of leases after repeated
defaults may be viewed as arbitrary or ultra
vires, particularly when it contravenes the
express terms of the allotment letter or
lease deed. The Supreme Court in Skyline
Contractors
Pvt.
Ltd.
(supra)
have
emphasized that deliberate non-compliance
with
payment
schedules
and
lease
conditions
justifies
cancellation
of
allotments. Courts have consistently held
that leniency towards such defaulters
undermines the integrity of the allotment
process and sets a detrimental precedent.

19. A policy of restoring leases after
long-term default would create a negative
precedent for future allottees to disregard
payment
schedules
and
statutory
obligations,
anticipating
eventual
concessions. This undermines the deterrent
effect
of
enforcement
measures
like
cancellation and e-auction, weakening the
overall governance framework of industrial
land allocation.

20. In essence, restoring a lease deed
after 14 successive failures to pay dues and
violations of statutory provisions is not
merely
a
question
of
administrative
discretion; it strikes at the very foundation
of fiscal discipline, public interest, and
industrial policy objectives. The UPSIDA
has acted in a manner that balances equity
with accountability, ensuring that public
resources
are
allocated
to
genuine
entrepreneurs
who
can
contribute
to
economic development and employment
generation. Any contrary approach risks
financial losses, delays in industrial growth,
and erosion of public trust in the State's
administrative fairness.

21. Therefore, having regard to the
petitioner's repeated non-compliance with
the demand notices dated 07.12.2020,
02.06.2021,
07.12.2021,
22.12.2021,
04.03.2022,
26.05.2022,
12.07.2022,
7 All. Smt. Savita Sharma Vs. State of U.P. & Ors.
585
24.11.2022,
14.12.2022,
14.03.2023,
09.06.2023, 19.09.2023, 28.12.2023, and
07.03.2023, coupled with the violation of
Clauses 15(a), 15(b), 15(c), and 23 of the
lease deed dated 09.09.2020 as well as
other provisions of the Urban Planning and
Development Act, 1973, this Court finds no
ground to extend indulgence in the exercise
of its writ jurisdiction. The grounds urged
by the petitioner do not merit interference
under Article 226 of the Constitution of
India, as UPSIDA's actions are neither
arbitrary nor violative of the principles of
natural justice.

22. Accordingly, for the reasons stated
hereinabove, the writ petition fails on
merits and is hereby dismissed. There shall
be no order as to costs.
----------
(2025) 7 ILRA 585
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 11.07.2025
BEFORE

THE HON'BLE MAHESH CHANDRA
TRIPATHI, J.
THE HON'BLE VINOD DIWAKAR, J.

Writ C No. 21819 of 2025

Smt. Savita Sharma ...Petitioner
Versus
State Of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Om Prakash Shukla

Counsel for the Respondents:
Anuj Pratap Singh, C.S.C.

Issue for consideration
Whether Petitioner's lease cancelled after prolonged
failure in payment of balance amount-legality of
impugned order examined.
Headnotes
Petitioner was allotted Plot-despite taking possession of
the plot-the petitioner failed to deposit the balance
premium amount-sought multiple extensions-upon her
failure-authority
cancelled
the
allotment-allottee
repeatedly defaults-especially over a prolonged period
involving multiple violations of lease terms and statutory
provisions-restoring such a lease poses significant fiscal,
administrative, and public policy challenges-impugned
order upheld-W.P. dismissed.
Held:
Urban Planning and Development Act, 1973Restoring a lease deed after 14 successive failures to pay
dues and violations of statutory provisions is not merely
a question of administrative discretion; it strikes at the
very foundation of fiscal discipline, public interest, and
industrial policy objectives. The UPSIDA has acted in a
manner that balances equity with accountability,
ensuring that public resources are allocated to genuine
entrepreneurs who can contribute to economic
development and employment generation. Any contrary
approach risks financial losses, delays in industrial
growth, and erosion of public trust in the State's
administrative fairness. (E-9)

Case Law Cited
1. Kyline Contractors Pvt. Ltd. v. State of U.P, (2008) 8
SCC 265
2. Kamla Nehru Memorial Trust and Others v.
U.P. State Industrial Development Corporation
Limited and Others, Arising out of SLP (C) Nos.
31887-88/2017
List of Acts
Urban Planning and Development Act, 1973