Bombay High Court Upholds MIDC's Priority Allotment Policy For Certain Industries; Says Preferential Allotment Not Arbitrary Under Article 14

The Bombay High Court has held that the policy adopted by the Maharashtra Industrial Development Corporation (MIDC) for priority allotment of industrial plots to specified “thrust sector” industries constitutes a legitimate and reasonable classification permissible under Article 14 of the Constitution. The Court observed that Article 14 does not mandate that all public land must invariably be allotted by public advertisement or auction, and that a rational, transparent policy creating a sub-class for preferential treatment to advance industrial development objectives does not amount to arbitrariness or discrimination.A division bench of Justices Vibha Kankanwadi and Hiten S. Venegavkar was hearing a writ petition challenging the decisions of the Minor Modification Committee and the Land Allotment Committee of MIDC, by which open spaces in the Chikalthana MIDC Industrial Area were allotted to private respondents. The petitioner claimed that his offline applications for allotment of the said plots were prior in time and that his proposed unit fell within a recognised thrust sector. He contended that the allotments made to the private respondents without public advertisement or auction were arbitrary, violative of Article 14, and contrary to MIDC circulars. The Court held that the priority allotment policy is founded on intelligible differentia, namely, entrepreneurs belonging to identified thrust sectors who meet specified criteria of investment, employment generation, and location, and that this classification bears a direct nexus with the object of promoting planned industrial growth. It said that such preferential treatment is constitutionally permissible and does not offend Article 14, as equality under the Constitution is equality among equals within the framework of a valid policy.“The policy does not exclude the general public from consideration as a matter of arbitrary favour; rather, it creates a legitimate and reasonable sub-class for preferential treatment, which is permissible under Article 14… the petitioner's broad proposition that MIDC's priority allotment policy and online system are per se unconstitutional because they do not involve advertisement and tender of each plot to the public at large cannot be accepted,” the Court observed.The Court further upheld MIDC's decision to mandate online applications as part of its “Ease of Doing Business” initiative, holding that a uniform digital process enhances transparency, reduces discretion, and does not operate as an arbitrary barrier for industrial entrepreneurs. It rejected the petitioner's contention that offline applications ought to have been entertained. It observed:“There is no absolute rule that all lands held by public bodies must in every case be allotted only by advertisement and tender. What is required is that the policy adopted must be rational, must serve a legitimate public purpose, must not be arbitrary or discriminatory, and must provide equal opportunity to all persons who are similarly situated within the framework of that policy.”The Court held that it cannot rewrite the policy or compel MIDC to abandon a transparent online system in favour of an ad hoc, offline seniority list which has no legal sanction.Accordingly, the High Court dismissed the writ petition and upheld the constitutional validity of MIDC's plot allotment policy. No order as to costs was passed.Case Title: Santosh v. State of Maharashtra & Ors. [WRIT PETITION NO. 13929 OF 2023 WITH CIVIL APPLICATION NO. 5708 OF 2025]Click Here To Read/Download Order

Bombay High Court Upholds MIDC's Priority Allotment Policy For Certain Industries; Says Preferential Allotment Not Arbitrary Under Article 14

Saksham Vaishya

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