Sub-lease cancellation quashed for lack of proved service, non-speaking reasons, and improper view of industrial use.

Cancellation of a sub-lease was found unsustainable where service of the show cause notices was not proved in the statutory mode, the cancellation communication gave no reasoned finding on breach of Clause II, Sub-clause 14, and the alleged use of the premises for software development and IT-enabled services required reconsideration under the sub-lease deed and development plan. The court treated the service defect and non-speaking order as material and held that industrial use could not be excluded as a matter of law merely because the premises also involved storage or office functions. The cancellation was quashed, with liberty to issue a fresh notice, consider the reply, inspect the premises, and pass a speaking order.

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Issues: Whether the cancellation of the sub-lease could be sustained when the alleged show cause notices were not proved to have been served, the impugned order was non-speaking, and the alleged use of the premises for software development and information technology enabled services required reconsideration under the sub-lease deed and the development plan.

Analysis: The failure to establish service of the show cause notices, in the face of the statutory mode of service under Section 43 of the Delhi Development Act, 1957, meant that the petitioner's denial of service could not be brushed aside. The cancellation communication merely recited alleged breaches without explaining how Clause II, Sub-clause 14 of the sub-lease deed was violated, and therefore did not contain a reasoned finding. The Court further held that the expression "manufacturing process" or "industry" had to be understood in a realistic and updated manner, and that software development and information technology enabled services could not be excluded as a matter of law from industrial use merely because the premises also involved storage or office use. In these circumstances, the impugned action required fresh consideration after inspection and a speaking order dealing with the petitioner's defence.

Conclusion: The cancellation order was unsustainable and was quashed, with liberty to the authority to issue a fresh show cause notice, consider the reply, and pass a speaking order.

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