The Madras High Court has dismissed an appeal filed by the State Industries Promotion Corporation (SIPCOT) against Singapore Realty Private Limited, a subsidiary of Singapore-based Lee Kim Tah Enterprises Private Ltd, related to the latter's project of setting up an integrated Township of 6,000 units in an area of 102 acre, at the Information Technology Park, Siruseri.
The division bench order has upheld an earlier order of a Single Judge, who dismissed SIPCOT's order of cancelling its Memorandum of Understanding (MoU) with the Singapore company.
The bench comprising of Justice N Paul Vasanthakumar and Justice P Devadass has ordered, "Respondents (the state government and the SIPOCOT) have no jurisdiction to cancel the MOU and allotment orders, before expiry of the period to complete the 1st phase of the project that was up to December 15, 2007."
They added that the respondents have violated the principles of natural justice as the company's civil right is affected and there is a chance to explain as on February 17, 2006 whether it was in a position to complete the 1st phase of the project before the said date in 2007 as the application for environmental clearance was pending and not rejected.
The events which ended up in litigation started with the Government of Tamil Nadu decided to develop an Information Technology Park (IT Park) at Siruseri, on the old Mahabalipuram road (OMR), through SIPCOT. The SIPCOT was planning to create a Township in the Park.
LKT Holdings, a Singapore Public listed company expressed interest in procuring land in SIPCOT IT Park to develop an Integrated Township to international standards within the IT Park, consisting about 6000 housing units to meet the housing requirement of IT Park and the IT Corridor.
The SIPCOT and the Government of Tamil Nadu has entered into an MOU with the company on September 16, 2003 at Chennai. Following this, the company and its consortium partners formed a Special Purpose Vehicle in Singapore LKT Enterprises Private Limited and have incorporated Singapore Realty Private Limited, a Joint Venture company in India.
As per the MoU, SIPCOT offered 102 acres of land within the IT Park for setting up of the Township project at a pre-fixed price of Rs 15 lakhs per acre, out of which Rs.13 lakhs per acre was to be paid to SIPCOT on allotment and the balance amount of Rs 2 lakhs per acre was to be paid on completion of the 1st phase of the project or at the end of three years from the date of sale deed, whichever is earlier.
The agreement was to development up to 6,000 housing units in three phases of 2,000 housing units each and phase 1 is to be completed within three years, from the date of registration of the sale deed and the subsequent phases were to be completed in two years each thereon, subject to demand.
The sale deed was executed on May 16, 2004 for 62.94 acres and another 41.17 acres was also allotted by a separate order dated December 10, 2004 on the same terms and conditions.
The dispute started when the State Government passed an order February 17, 2006 cancelling the MoU stating that the project cannot be completed, as the Ministry of Environment and Forest, Government of India has asked the company to stop works stating that the completion of the project as per the terms in MoU has become practically impossible due to environment clearance issues.
Cancelling the allotment, SIPCOT asked the company to re-convey the property and hand over the possession. The company challenged the state government's order stating that the application for environmental clearance was still pending and not rejected. A single Judge has passed an order in favour of the company, which was challenged by SIPCOT in the division bench.
ALSO READ: Tamil Nadu plans 16,400-acre land bank
ALSO READ: TN govt to set up industrial park: Jayalalithaa
