Partly allowed

Vst Tillers Tractors Limited v. Karnataka Industrial Areas Development Board

Karnataka HC16 Jun 2023WP/11071/2017

Case brief

AI extract

What is this about?

In a writ petition challenging the forfeiture of a land deposit by KIADB, this Court held that forfeiture guidelines applicable to non-payment of balance cost do not apply where the withdrawal is due to the Respondent's failure to allot full extent of land. The Court directed refund of the forfeited sum with interest, distinguishing this case from M/s. Chantilly Group where facts were different.

What the court decided

AI extract

Vst Tillers Tractors Limited Vs Karnataka… — Writ and Judicial Review | Karnataka HC (2023)

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NC: 2023:KHC:20981 WP No. 11071 of 2017

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 16^TH DAY OF JUNE, 2023

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BEFORE

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THE HON'BLE MR JUSTICE C.M. POONACHA WRIT PETITION NO. 11071 OF 2017 (GM-KIADB)

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BETWEEN:

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VST TILLERS TRACTORS LIMITED HAVING ITS REGISTERED OFFICE AT PLOTNO.1 DYAVASANDRA INDUSTRIAL LAYOUT WHITEFIELD ROAD

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MAHADEVAPURA POST BENGALURU-560 048 REPRESENTED BY ITS MANAGING DIRECTOR

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…PETITIONER

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(BY SRI. ABHINAY Y T., ADVOCATE FOR SRI. SIDDARTHA S G., ADVOCATE)

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AND:

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KARNATAKA INDUSTRIAL AREAS DEVELOPMENT BOARD #49, 4TH & 5TH FLOORS EAST WING, KHANIJA BHAVAN RACE COURSE ROAD

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Digitally signed by BELUR RANGADHAMA NANDINI Location: HIGH COURT OF KARNATAKA

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BENGALURU-560 001 REPRESENTED BY ITS CHAIRMAN

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(BY SRI. P V CHANDRASHEKAR., ADVOCATE)

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…RESPONDENT

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THIS WP IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE LETTER DTD.26.11.2016 VIDE ANNEX-M AND DIRECT THE RESPONDENT TO REFUND A SUM OF RS.1,35,31,500/- TO THE PETITIONER ALONG WITH INTEREST AT THE RATE OF 18% PER ANNUM FROM 6.8.2016 TILL THE DATE OF PAYMENT AND ETC.

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

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NC: 2023:KHC:20981 WP No. 11071 of 2017

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ORDER

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The above Writ Petition is filed seeking for the following reliefs:

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"a) Quash the letter dated 26.11.2016 bearing No.KA Ke Pra Ma/Kem Ka/Hanchike/473/12568/ 2016-17 (Annexure-M) and direct the respondent to refund a sum of ` 1,35,31,500/- to the Petitioner along with interest at the rate of 18% per annum from 6.8.2016 till the date of payment.

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b) And pass such other orders as this Hon'ble Court deems fit, in the interest of justice and equity."

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It is the case of the Petitioner that pursuant to the

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approval of its project by the State High Level Clearance Committee ('SHLCC' for short) in its meeting held on 4.3.2014, wherein the project of the Petitioner for establishment of an unit to manufacture "Power Tillers, Tractors and Agricultural Machinery", in an extent of 15 acres of land in Jakkasandra Industrial Area was approved, the Respondent - KIADB, vide allotment letter 16.7.2014 (Annexure-C to the Writ Petition) allotted 15 acres of land in Sy.Nos.16/P1, 16/b3, 16/b4, 134 and 16/b8 of Jakkasandra Industrial Area, Kolar District, at `145.50 lakhs + 10% extra for corner plot charges. Thereafter, the Petitioner, vide letter dated 12.8.2014 (Annexure-D to the

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Writ Petition) tendered the requisite amount being 30% advance as stipulated by the KIADB and requested for grant of an alternate land since the land and terrain is not suitable. Upon a request made by the Petitioner for alternate land, the KIADB vide its letter dated 30.10.2015 (Annexure-E to the Writ Petition) allotted 15 acres of land in plot No.50 in lieu of the earlier allotment and called upon the Petitioner to remit a sum of `15,79,36,134/- towards the balance cost of the land.

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The KIADB vide letter dated 13.5.2016 (Annexure-H

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to the Writ Petition) informed the Petitioner that out of 15 acres of land allotted, an extent of 8 acres is free from litigation and remaining 7 acres is under litigation. The Petitioner, vide letter dated 29.6.2016 (Annexure-J to the Writ Petition), having regard to the fact that the land allotted to it is under litigation, indicated its intention to withdraw the application for allotment and sought for refund of the initial deposit of 6,76,57,500/-. The KIADB refunded a sum of 5,41,26,000/-.

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The Petitioner vide its letter dated 17.8.2016 (Annexure-K to the Writ Petition) sought for refund of the remaining sum of `1,35,31,500/-. The KIADB failed to refund

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the same. Hence, the Petitioner got issued a legal notice dated 26.10.2010 (Annexure-L to the Writ Petition) which was replied by the KIADB vide its reply dated 26.11.2016 (Annexure-M to the Writ Petition) whereunder the Petitioner was informed that the said sum of `1,35,31,500/- retained by it has been forfeited consequent to clause 1(a) of its Circular dated 31.8.2015 (Annexure-N to the Writ Petition). Being aggrieved, the present Writ Petition is filed.

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The Respondent - KIADB has entered appearance

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and filed Statement of Objections contending, inter alia, that it is entitled to forfeit 20% of the amount paid to it as initial deposit having regard to the guidelines framed in the 335^th Meeting of its Board held on 14.8.2015.

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Sri Abhinay Y.T, learned Counsel for the Petitioner contended that the Petitioner was constrained to withdraw its application for allotment of land since the KIADB did not allot entire extent of 15 acres of land as required for starting its manufacturing project. That since the Petitioner withdrew its application for no fault on its part, the entire amount paid by it is required to be refunded together with interest. In support of

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his contention, the learned Counsel relied upon a judgment of a Co-ordinate Bench of this Court in the case of M/s. Chantilly

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Group v. State of Karnataka and others¹ .

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Per contra, Sri P.V.Chandrashekar, learned Counsel

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for the Respondent - KIADB justified the forfeiture and sought for dismissal of the Writ Petition.

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I have considered the submissions made by both the learned Counsel and perused the material on record. The question that arises for consideration is:

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Whether the Respondent is liable to refund the forfeited amount to the Petitioner?

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The essential facts regarding allotment of 15 acres of land, payment of the initial deposit, only 8 acres of the land out of the originally allotted area of 15 acres being available for allotment, due to which the Petitioner sought for withdrawal of its application and refund of the amount deposited and the fact that the KIADB has refunded a sum of 5,31,26,000/- to the Petitioner and forfeited a sum of 1,35,31,500/- being

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1 WP No.65254/2016, DD 20.4.2023

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undisputed, the only aspect that is required to be considered is, whether the KIADB is entitled to forfeit the said amount.

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In its 335^th Meeting held on 14.8.2015 the Board of KIADB approved guidelines to be followed for refund of the amount remitted by allottees in respect of allotments made for the industrial areas on the basis of which the Circular dated 31.8.2015 (Annexure-N to the Writ Petition) is issued. The clause regarding forfeiture relevant for the present case is as under:

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"1. Allotments made in Industrial Areas

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a) To forfeit 20% of the amount paid towards initial deposit instead of 10% in cases of cancellation of allotments for non-payment of balance land cost within the stipulated period."

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It is relevant to note that the allotment was made

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by the KIADB to the Petitioner on 16.7.2014 i.e., prior to the Circular being issued. Thereafter, the revised allotment was made on 30.10.2015. It is undisputed that the Petitioner had made the initial deposit prior to the guidelines being approved by the Board of the KIADB.

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NC: 2023:KHC:20981 WP No. 11071 of 2017

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Notwithstanding the above, it is relevant to note that the Petitioner has decided to withdraw its application for allotment since the KIADB had communicated to the Petitioner that only 8 acres of land (out of originally allotted land of 15 acres) is free from litigation and the remaining 7 acres is under litigation. Hence, it is clear that the Petitioner was constrained to seek for withdrawal of its application since the entire extent of land allotted was not handed over by the Respondent - KIADB.

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Even the guidelines entitling the Respondent - KIADB to forfeit 20% of the amounts paid towards initial deposit is in respect of a case of "cancellation of allotment for non payment of land cost within the time stipulated". Admittedly, the present case is not a situation where the allotment has been cancelled for non payment of the balance land cost. Hence, the said stipulation regarding forfeiture is not applicable to the facts of the present case and the relief sought for by the Petitioner is liable to be granted. Accordingly, the question framed for consideration is answered in the affirmative.

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In the case of M/s. Chantilly Group¹ , a co-

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ordinate Bench of this Court directed that amounts be refunded with interest @ 6% per annum. However, the facts in the said case are different from the facts in this case, inasmuch as in the present case, the KIADB themselves intimated the Petitioner that out of the entire land of 15 acres allotted, only 8 acres is free from litigation and 7 acres is under litigation. It is in that context that the Petitioner withdrew its application for allotment of land and requested for refund of the deposit amount.

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In view of the aforementioned, I pass the following:

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ORDER

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i. The Writ Petition is partly allowed;

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ii. The letter dated 26.11.2016 passed in No.Ka Ke Pra Ma/Kem Ka/Hanchike/473/12568/2016-17 issued by the Respondent is quashed;

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iii. The Respondent is directed to refund to the Petitioner a sum of `1,35,31,500/- within three months from the date of receipt of a copy of this order together with interest at 8% p.a., from the

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date of the Writ Petition i.e., 10.3.2017 till date of payment. In the event, the said amount together with interest is not refunded within three months as stipulated, the Respondent will be liable to refund the entire amount together with interest at 12% p.a., from the date of the Writ Petition i.e., 10.3.2017 till date of payment.

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No costs.

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Sd/JUDGE

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Nd/List No.: 1 Sl No.: 10

Vst Tillers Tractors Limited v. Karnataka Industrial Areas Development Board

Case brief

What is this about?

What the court decided

Vst Tillers Tractors Limited v. Karnataka Industrial Areas Development Board

Case brief

What is this about?

What the court decided

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Issues for consideration

Cases cited

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