Disposed

Maharshi Enterprise v. the Karnataka Industrial Areas

Karnataka HC3 Jul 2023WP/103751/2023

Case brief

AI extract

What is this about?

Petitioner challenged cancellation of lease cum sale allotment for non-completion of industrial project citing pandemic-induced delays. Court disposed of writ, directing respondents to sympathetically consider representations for timeline extension and penalty payment before proceeding.

What did the court decide?

Writ disposed. Respondents directed to consider representations within one week for timeline extension and penalty payment passage suitable orders.

Maharshi Enterprise Vs the Karnataka Industrial Areas — Property and Title | Karnataka HC (2023)

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NC: 2023:KHC-D:6539 WP No. 103751 of 2023

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

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DATED THIS THE 03^RD DAY OF JULY, 2023

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BEFORE

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THE HON'BLE MR JUSTICE PRADEEP SINGH YERUR

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WRIT PETITION NO. 103751 OF 2023 (GM-KIADB)

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BETWEEN:

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MAHARSHI ENTERPRISE REPRESENTED BY IT PROPRIETOR, FAKKIRAPPA YALLAPPA NAYKAR, AGE: 40 YEARS, OCC: BUSINESS, R/O: KOTUR, TQ:DIST: DHARWAD-08.

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…PETITIONER

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ROHAN HADIMANI T High Court of Karnataka, Dharwad

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(BY SRI SANTOSH B. MALLIGAWAD, ADVOCATE)

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AND:

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THE KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD, REPRESENTED BY ITS CHIEF EXECUTIVE OFFICER AND CHIEF EXECUTIVE MEMBER, NO.49, KAHNIJA BHAVAN, BENGALURU-560 001.

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JOINT DIRECTOR, KARNATAKA INDUSTRIAL AREA DEVELOPMENT BOARD,

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HEAD OFFICE NO.49, KAHNIJA BHAVAN, BENGALURU-560001.

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THE ASSISTANT SECRETARY, KARNATAKA INDUSTRIAL AREA DEVELOPMENT BOARD, ZONAL OFFICE AT PLOT NO.33/A, LAKAMANAHALLI, INDUSTRIAL AREA, POONA BENGALURU ROAD, DHARWAD-580004.

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THE ASSISTANT ENGINEER/ JOINT ENGINEER, KARNATAKA INDUSTRIAL AREA DEVELOPMENT BOARD ZONAL OFFICE AT PLOT NO.33/A, LAKAMANAHALLI, INDUSTRIAL AREA, POONA BENGALURU ROAD, DHARWAD-580 004.

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…RESPONDENTS

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(BY SRI P.N. HATTI, ADVOCATE)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT IN THE NATURE OF CERTIORARI QUASHING THE ORDER DATED 05/04/2023 BEARING NO. KA.KAI.PRA.MAM./KHEM.KA/HANCHIKE/5192/752/2023-24 PASSED BY RESPONDENT NO.1 VIDE ANNEXURE-G; ISSUE A WRIT IN THE NATURE OF MANDAMUS DIRECTING RESPONDENTS TO CONSIDER THE ANNEXURE-E REPRESENTATION DATED 27/12/2022 IN EXTENDING THE TIME FOR COMPLETION OF PROJECT AS ONE TIME MEASURE IN THE INTEREST OF JUSTICE AND EQUITY.

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

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3 - NC: 2023:KHC-D:6539 WP No. 103751 of 2023

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ORDER

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This petition is filed by the petitioner seeking for a writ of certiorari to quash the order dated 05.04.2023 passed by respondent No.1 and for writ of mandamus to direct the respondents to consider the representation vide Annexure-E for extension of time for completion of the project as one time measure.

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Petitioner applied for allotment of site in the industrial area for establishing fabrication work. Respondent No.1 allotted plot No.551B(p) measuring 14 X 40 Sq.mtrs at Belur industrial area Dharwad vide leasecum-sale agreement dated 18.02.2015 for a period of 10 years. Subsequent to which, possession was delivered to the petitioner. Agreement contemplates the petitioner to commence the work within a period of 24 months from the date of execution of the lease-cum-sale agreement. The agreement was executed on 18.02.2015 and thereafter, due to the Covid-19 global pandemic, petitioner was unable to garner funds in furtherance of the project which

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he had undertaken. Though it is stated that petitioner has commenced substantial work with regard to construction

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of the factory premises, he was unable to meet the deadlines as required under the agreement.

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Respondent No.1 issued a show-cause notice dated 12.12.2022 directing the petitioner to complete the project within 90 days and submit the reply within 30 days from the receipt of notice. To which, petitioner replied vide letter dated 27.12.2022. Thereafter, respondent No.4 issued a notice dated 10.03.2023 calling upon the petitioner to appear-in-person and submit relevant documents. Since the petitioner did not comply with the requirements of the respondent's notice dated 10.03.2023, respondent No.1 was perforced to cancel the allotment of the petitioner vide letter dated 05.04.2023 on the ground of non commencement of the project in time and non fulfillment of the terms and conditions of the lease-cumsale agreement. Aggrieved by the said cancellation and

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the repossession of the property to be taken by the respondents, petitioner is before this Court.

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Learned counsel for the petitioner contends that

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the delay in commencing the factory was due to Covid-19 global pandemic situation which paralyzed the financial condition of the petitioner which was not in his control and

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if the lease-cum-sale is cancelled, petitioner will be deprived of his livelihood and he is ready to meet any of the conditions with regard to the payment of the penalty that would be imposed by the respondents in accordance with lease-cum-sale agreement and any other conditions prescribed by the respondents. He also contends that no opportunity was given to him nor was he heard with regard to his precarious financial condition and for not meeting the deadlines as per the lease agreement. On these grounds, he seeks to allow his application and provide an opportunity to him to complete the factory construction and commencement of the production in a

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reasonable time. Accordingly, he seeks to allow the petition.

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Per contra , learned counsel Shri P.N.Hatti, representing the respondents vehemently contends that reasonable and sufficient opportunity was granted to the petitioner to comply with the terms and conditions of the lease-cum-sale agreement which was executed on 18.02.2015 for a period of 10 years. He further contends that as per lease-cum-sale agreement, the commencement ought to have started within 24 months and thereafter, since he had not started time and again the period was extended to the petitioner to facilitate him to recover from financial losses, secure financial loans if

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any and put up the construction and the production activity. He also contends that lease-cum-sale agreement is self explanatory and provides for remedial actions as per clause 10 which provides for further extension and payment of penalty and completion of work and production of the unit. It also contemplates that no further extension

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shall be granted beyond a total period of four years from lease-cum-sale agreement or possession certificate whichever is later. Provided an opportunity for remedying a breach is afforded in terms of clause 34-B(i) and 34-B(ii) of the KIADB Act, 1966. He also contends that if the petitioner does not complete the civil construction work, erection of machineries and commencement of production from the end of the period 4 years, the lease shall automatically stand terminated. Admittedly, in the present case, petitioner has not met the deadlines as required and neither he has completed construction work nor he has commenced the production. Under the circumstance, learned counsel for the respondents contends that respondents have initiated the process in accordance to law by issuance of notice for cancellation of the leasecum-sale allotment and for repossession of the property. He further contends that there is no illegality or arbitrariness in the action initiated by the respondents. Hence, he seeks to dismiss the writ petition.

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The fact remains that petitioner was allotted the

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unit by respondents on a lease-cum-sale basis. Since, he has not complied with the terms and conditions of the lease-cum-sale agreement, process has been followed for cancellation and repossession of the unit by respondents. The object of the act is to facilitate/encourage the persons to start commercial activities in industrial nature and respondents to secure revenue from the same. In the present case due to Covid-19 global pandemic, petitioner was unable to start the work. However, I do not see any arbitrariness in the order passed by the respondents for initiation of cancellation and recovery of possession of the property. The fact remains that even if repossession is taken, same would have to be allotted to another party. In the present case, petitioner is willing to pay the penalty and other charges that would be imposed by the respondents in accordance to lease-cum-sale agreement

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and other Rules, if any. The same shall be considered by respondents favourably by imposing suitable penalty as per the lease-cum-sale agreement and prevailing market

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price which is agreeable to the petitioner. Hence placing these submissions, I dispose of this writ petition in the following manner. Accordingly, I proceed to pass the following;

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ORDER

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i) The writ petition is disposed of.

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ii) Respondents shall consider the

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representation already submitted or any further representation which would be submitted within a week's time from today with regard to meeting the required timelines and also for payment of the penalty and other dues contemplated under the lease-cum-sale agreement and the prevailing market price which shall be considered by the respondents sympathetically and pass suitable orders.

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iii) If the petitioner does not approach by

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any fresh representation within a period of one

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NC: 2023:KHC-D:6539 WP No. 103751 of 2023

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week from today, the respondents are at liberty

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to proceed in accordance with law.

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iv) The respondents shall consider the representation within a period of 4 weeks of

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submission of the representation.

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Sd/JUDGE

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AM List No.: 1 Sl No.: 9

Maharshi Enterprise v. the Karnataka Industrial Areas

Case brief

What is this about?

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Maharshi Enterprise v. the Karnataka Industrial Areas

Case brief

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