Partly allowed

M/S Concept Technologies v. Karnataka Industrial Area Development Board

Karnataka HC6 Dec 2021WP/51389/2017

Case brief

AI extract

What is this about?

This writ petition challenged a penalty order for delayed construction under a lease-sale agreement. The court granted five months to pay the penalty, considering the pandemic, and directed the respondents to issue clearance and possession certificates, subject to payment.

What did the court decide?

Petitioner granted five months to pay Rs.21,00,393/- penalty; respondents directed to issue clearance and possession certificates upon payment; 6% p.a. interest applicable if unpaid.

M/S Concept Technologies Vs Karnataka… — Contract and Commercial Disputes | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 6^TH DAY OF DECEMBER, 2021

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BEFORE

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THE HON’BLE MR. JUSTICE ANANT RAMANATH HEGDE

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WRIT PETITION NO.51389/2017 (GM-KIADB)

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BETWEEN:

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M/S CONCEPT TECHNOLOGIES, "SLC EUPHORI A" F-4, 1^ST FLOOR, LOTTEGOLLAHALLI, ANJANAMURTHY LAYOUT, RMV EXTENSION, BANGALORE - 560 094 REPRESENTED BY ITS MANAGING PARTNER V. SREENIVAS S/O. SRI. B. VISHWANATH, AGED ABOUT 46 YEARS ... PETITIONER (BY SRI. R.S. RAVI, ADV.)

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AND

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KARNATAKA INDUSTRIAL AREA DEVELOPMENT BOARD, (A GOVERNMENT OF KARNATAKA UDERTAKING) NO.49, 4^TH AND 5^TH FLOOR, KHANIJA BHAVAN, RACE COURSE ROAD, BANGALORE - 560 001 REPRESENTED BY ITS CHIEF EXECUTIVE OFFICER AND EXECUTIVE MEMBER ... RESPONDENT (BY SRI. VIJAY KUMAR A. PATIL, ADVOCATE)

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THIS PETITION IS FILED UNDER ARTCLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR RECORDS FROM THE OFFICE OF THE RESPONDENT WHICH ULTIMATELY RESULTED IN PASSING THE IMPUGNED ORDER DTD: 6.10.2017 AS PER ANNEXURE-A AND ETC.,

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THIS PETITION COMING ON FOR PRELIMINARY HEARING - B GROUP THIS DAY, THE COURT MADE THE FOLLOWING:

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O R D E R

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This writ petition is filed challenging the order at Annexure - A, dated 06.10.2017, issued by the Karnataka Industrial Areas Development Board-1^st respondent (Hereinafter referred to as 'KIADB' for short). In terms of the said order the petitioner is directed to pay Rs.21,00,393/- by way of penalty for not having completed the construction of the building in terms of the lease cum sale agreement dated 30/05/2014. However, in terms of the impugned order at Annexure- A, time is extended by one year for completion of construction of the building in the site allotted to the petitioner.

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The factual background necessary for

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adjudication of this case can be summed up as under:

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Industrial plot bearing plot No.IP-33 in Gowribidanur Industrial Area was allotted to Southern India Ink in terms of order dated 08.08.2012. The possession of the land was given to the grantee on 09.04.2014. The lease cum sale agreement was executed in favour of grantee on 30.05.2014. In terms of supplementary agreement dated 20.09.2016, the name of the petitioner is substituted, at the request of original grantee. Thus, for all purposes the present petitioner is the person holding lease cum sale agreement in respect of industrial land referred above.

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The agreement dated 30.05.2014 stipulates terms and conditions to be followed by the grantee. The said terms and conditions are now binding on the

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present petitioner who has come into picture in terms of supplementary agreement dated 20.09.2016.

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It is an admitted fact that the structure was not completed within the stipulated period. However, the lease cum sale agreement provides for extension of time for construction of the building on certain conditions. Annexure-A, the order which is impugned is one of such orders where time period for construction of the structure is extended on imposing penalty as provided in the agreement itself. The petitioner has questioned quantum of penalty which is fixed at Rs.21,00,393/-.

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This Court in terms of the interim order dated 15.11.2017, though stayed the operation of the impugned order at Annexure - A, has also passed the following order:

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"Notwithstanding the interim order, the petitioner during the pendency of this

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petition shall take effective steps to complete the project as per the requirement".

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Learned counsel for the petitioner, submits that

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the petitioner has completed the construction of the building in the site allotted. Petitioner today has produced a memo along with 14 photographs relating to the construction which is said to have been made by the petitioner. The memo along with the photographs are placed on record.

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From the photographs, it is seen that

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substantial construction is made. It is to be noticed that this construction is made taking shelter under interim order passed by this Court referred above. From the photographs, it can be inferred that the petitioner has invested substantial amount for construction of the structure. It is not in dispute that respondents have not cancelled the site which is allotted to the petitioner.

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The interim order granting permission to

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construct the building in the leased premises is not questioned by the respondents. Such being the factual position, it would be unfair to deny the benefit to the petitioner flowing from construction of the building in the leased premises pursuant to the interim order. Under the circumstances, considering the fact that the petitioner has put up the construction pursuant to the interim order, and considering the fact that the respondents have also time and again extended the time for construction of the building, the respondents should be directed to take further steps in issuing necessary completion certificate, revised possession certificate and such other clearance after ensuring compliance of other requirements by the petitioner.

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As far as, challenge to the quantum of penalty fixed in terms of impugned order at Annexure - A, there

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is nothing on record to suggest that the quantum of penalty imposed by the respondents is contrary to the agreement. The learned counsel for the petitioner has not seriously disputed the quantum of penalty imposed in Annexure - A. The learned counsel would further submit that if six months time is granted to the petitioner to pay the penalty imposed in terms of annexure - A, same would be paid by the petitioner. The learned counsel would further submit that the difficulties posed on account of Covid-19 pandemic is to be taken into consideration to grant his prayer for six months time to pay the penalty.

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This Court finds some justification in granting the time to pay the penalty considering the difficulties posed on account of Covid-19 pandemic. Taking into consideration the developments following the interim order dated 15.11.2017, this Court finds that the relief

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needs to be moulded in the interest of justice and equity. Hence, the following:

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ORDER

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(i) The petitioner is granted five months time to pay Rs.21,00,393/- the amount of penalty imposed in terms of Annexure - A dated 06.10.2017.

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(ii) The respondents are directed to issue necessary clearance certificate, revised possession certificate subject to compliance of any other requirement relating to construction of the building in the allotted site on payment of penalty of Rs.21,00,393/-

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(iii) In case if the amount referred above is not paid within five months from the date of receipt of the copy of this order, the petitioner shall pay interest @ 6% p.a. on

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Rs.21,00,393/from 06.10.2017 till

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realisation of entire amount.

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Accordingly, writ petition is disposed of.

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Sd/JUDGE

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brn

M/S Concept Technologies v. Karnataka Industrial Area Development Board

Case brief

What is this about?

What did the court decide?

M/S Concept Technologies v. Karnataka Industrial Area Development Board

Case brief

What is this about?

What did the court decide?

What the court decided

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