Solar Panel Not Industrial Structure To Validate Use Of Land For Industrial Purpose: Madras High Court Upholds SIPCOT’s Allotment Cancellation
The Madras High Court was considering a Writ Appeal in a petition filed by the petitioners challenging the proceedings of the State Industries Promotion Corporation of Tamil Nadu Limited (SIPCOT).
Justice S.M. Subramaniam, Justice K. Surender, Madras High Court
The Madras High Court has upheld an order of the State Industries Promotion Corporation of Tamil Nadu Limited (SIPCOT) cancelling the allotment of land after it was utilised for setting up a solar panel and not a unit for the manufacture of Forged / Machined Auto Components as stipulated in the Lease Deed. The High Court also held that a solar panel is not an industrial structure.
The High Court was considering a Writ Appeal in a petition filed by the petitioners challenging the proceedings of the State Industries Promotion Corporation of Tamil Nadu Limited (SIPCOT), cancelling a portion of the allotted land.
The Division Bench of Justice S.M. Subramaniam and Justice K. Surender held, “The only ground raised by Mr.Anand Gopalan, learned counsel for the appellant is that a Solar Panel has been installed in the subject portion of the land and would show us a photograph to that effect. The said photograph shown before this Court is of no avail, since Solar Panel is not an industrial structure and the unutilized portion of the land has not been utilized to set up a unit for the manufacture of Forged / Machined Auto Components. Clause-14(i) reiterates that the allotted land must be utilized for the purpose for which it was allotted and Authorities found that the land has not been utilized for any industrial purpose as stipulated in the Lease Deed as well as in the Project report.”
Advocate Anand Gopalan represented the Appellant, while Standing Counsel R.Revathi represented the Respondent.
Factual Background
An industrial plot was allotted in favour of the appellant in 2005, and a lease deed was executed between the appellant and SIPCOT. As per Clause 14(i) of the Lease Deed, if the land allotted to the appellant was not put to use for the purpose for which it was allotted or was in excess of the actual requirements, SIPCOT had the right to cancel the allotment in respect of such land or excess land as the case may be, and resume the same under the provision of TNPPE Act. In the event of resuming excess land by SIPCOT, the allottee was entitled for refund of the plot deposit.
The appellant / Lessee agreed to the terms and conditions of the lease, but the Authorities found that an extent of 3.7 acres of allotted land remained unutilized. A notice was issued to the appellant to surrender the unutilized portion of the land, which was declined. Thus, SIPCOT invoked Clause 14(i) of the Lease Deed to cancel the allotted land to the extent of unutilized land and ordered for resumption.
Reasoning
The Bench made it clear that a solar panel is not an industrial structure, and the unutilized portion of the land was not utilised to set up a unit for the manufacture of Forged / Machined Auto Components.
The Bench noted that, as per Clause-14(i) the allotted land must be utilised for the purpose for which it was allotted, and Authorities found that the land was not utilised for any industrial purpose as stipulated in the Lease Deed as well as in the Project report.
Thus, finding no infirmity in respect of the Writ Order, the Bench dismissed the Writ Appeal and held that SIPCOT was bound to refund the deposit amount as per Clause-14(i) of the Lease Deed as directed by the Writ Court.
Cause Title: Kems Forging Ltd. v. The State Industries Promotion Corporation of Tamilnadu Ltd. (SIPCOT) (Neutral Citation: 2026:MHC:913)