Case Note & Summary
The appeal by special leave arose from an order of the Division Bench of the High Court of Orissa, Cuttack Bench in OJC No.779/89. The appellant was the Managing Director of Orissa Industrial Infrastructure Development Corporation (O.I.I.D.C.), Bhubaneswar, a corporation constituted under the Orissa Industrial Infrastructure Development Corporation Act, 1980. The respondent was an applicant/allottee of an industrial plot or shed under a 90-year lease offered by the Corporation. The Board of Directors managed the affairs of the Corporation under Section 4, subject to Government directions under Section 18. Under Section 49, the State Government could place industrial areas or industrial estates under the management and control of the Corporation. In furtherance thereof, certain plots were offered for allotment. By letter dated August 1, 1987, the appellant offered a shed for a 90-year lease for the consideration mentioned therein. The respondent accepted the offer by letter dated September 3, 1987 and requested transfer of the plot in his favour. In furtherance thereof, the plot came to be allotted. Subsequently, relying upon internal correspondence between the Government and the respondent and a letter of the Government dated 14.10.1980, the respondent filed a writ petition in the High Court seeking a direction to reduce the amount fixed under the lease. The High Court in the impugned order directed that the matter be placed before the Government for final decision in the light of the directions. The core legal issue was whether the High Court was correct in law in directing the matter to be placed before the State Government, considering the powers of the State Government under Sections 18 and 33 of the Act. The respondent relied on Section 33 and the Government letter dated 14.10.1980 to argue that the Government had control over disposal of land and that the lease amount should be reduced. The appellant contended that the Government directions under Sections 18 and 33 were limited to policy guidelines and did not permit routine administrative interference in the day-to-day management of the Corporation. The Supreme Court examined Section 4, which vests general superintendence, directions and management of affairs and business of the Corporation in the Board of Directors subject to powers issued by the Government under Section 18. Section 18 allows the State Government to issue general or special directions as to policy necessary for carrying out the purposes of the Act. Section 33 contemplates certain directions by the State Government to the Corporation for disposal of land acquired by the Government and transferred to it without undertaking development. The Court held that such directions under Section 33 are not to be construed as routine administrative directions in the day-to-day administration of the Corporation; they must be read along with Section 18 as policy guidelines. The letter relied on by the respondent indicated that the State had assumed management in the day-to-day control of the administration of the affairs of the Board and the manner in which sites were to be disposed of, which went beyond the Government's power under Section 18 read with Section 33. Consequently, the High Court was not right in giving direction to place the matter again before the Government. The appeal was allowed. Six months' time was given to the respondent to pay the balance amount. No costs were awarded.
Headnote
A) Statutory Corporation - Autonomy and Management - Sections 4, 18, 33 of Orissa Industrial Infrastructure Development Corporation Act, 1980 - State Government's power to issue directions is limited to policy guidelines and does not extend to routine day-to-day administration or disposal of properties - The High Court erred in directing the matter to be placed before the State Government for final decision on lease premium, as the Government exceeded its power under Sections 18 and 33 by assuming control over site disposal - Held that the Corporation Board alone has authority to manage its affairs and fix lease terms; appeal allowed and respondent granted six months to pay balance amount (Paras Not mentioned).
Issue of Consideration
Whether the High Court was correct in directing the matter to be placed before the State Government for final decision regarding the lease amount, given the scope of the State Government's powers under Sections 18 and 33 of the Orissa Industrial Infrastructure Development Corporation Act, 1980.
Final Decision
The appeal was allowed. The High Court's direction to place the matter before the State Government was set aside as erroneous. Six months' time was given to the respondent to pay the balance amount. No costs were awarded.
Law Points
- State Government's power under Section 18 read with Section 33 of the Orissa Industrial Infrastructure Development Corporation Act
- 1980 is limited to policy directions
- not routine day-to-day administration
- Board of Directors has general superintendence and management under Section 4
- High Court cannot direct matter to Government when Government exceeded statutory power
